Ouch

The year over year inflation rate this year has hit 8½% last month.

U.S. inflation surged to a new four-decade high of 8.5% in March from the same month a year ago, driven by skyrocketing energy and food costs, supply constraints and strong consumer demand.

The Labor Department on Tuesday said the consumer-price index — which measures what consumers pay for goods and services — last month rose at its fastest annual pace since December 1981, up from the 7.9% annual rate in February. Rising prices have been unrelenting, with six straight months of inflation above 6% that is well above the Federal Reserve’s average 2% target.

………

The so-called core price index, which excludes the often-volatile categories of food and energy, increased 6.5% in March from a year earlier — up from February’s 6.4% rise, and the sharpest 12-month rise since August 1982.

The Fed is going with a 500 basis point (½%) rate increase the next meeting, and probably the one after that.

Unless I miss my guess the Fed will over-correct, because they always do.