The last ten years of inflation

The chart above shows annual inflation for the last decade. Up until 2017 inflation remained under 2% (the midpoint target) and last year it took off smashing through 3%, 4%, 5%, 6% and now 7%.

What makes it more painful too isn’t just the peak, but how long it stays above 2%. If you have a year at 7%, a year at 5% and a year at 4% then over the three years prices will be 17% higher.