There are several reasons behind this bout of high inflation. First, the economy is strong and employers have been adding more than 400,000 jobs for 11 straight months.

Really?

In July 2019 the non-farm jobs count (purple line) of 150.921 million was virtually identical to the March 2022 figure of 150.925 million. To be exact, we are talking about a 4,000 jobs difference in an economy with a potential work force of more than 200 million.

Nevertheless, despite a 4.2 million increase in the population since then, which has made the labor market slightly looser, the Y/Y inflation rate in March 2022 of 8.55%was 4.7 times higher than the rate of 1.82% back then.

Self-evidently, the US economy isn't strong, while the domestic job situation – which has just barely returned to the July 2019 status quo ante – has had precious little impact on the accelerating inflation rates to date. Instead, the gale force of inflation is largely imported, owing to soaring, globally-priced energy, food and other commodity prices and the double whammy of supply chain disruptions, first from the Covid-Lockdowns and now from the Ukraine War.

Of course, the fact that the leading edge of goods and services inflation has originated in the global economy makes our point about the impossibility of central banking in one country all the more salient. In order to even begin to dent the reported CPI figures in the next few quarters the Fed will have to monkey-hammer the stock and bond markets like never before – given that these red hot gambling venues have become its main transmission channel to the main street economy.