What’s Behind the Recent Rise in Core Inflation?

As the COVID-19 pandemic disrupted the economy last spring, inflation fell dramatically. One year later, the opposite is occurring with inflation surpassing 3%. Health care and used cars are the main drivers for the recent spike in prices and their increases are expected to be short-lived.

Read more in the SF Fed Blog by Adam Hale Shapiro, and check out some underlying research on our Inflation Sensitivity to COVID-19 data page.

The Federal Reserve Bank of San Francisco (SF Fed) serves the public by promoting a healthy, sustainable economy, and supporting the nation’s financial and payment systems. With offices in Los Angeles, Seattle, Salt Lake City, Portland and Phoenix, the Bank serves the Twelfth Federal Reserve District, which includes one-fifth of the nation’s population and represents the world’s fourth-largest economy. As part of the nation’s central bank, the SF Fed informs monetary policy, regulates banks, administers certain consumer protection laws and acts as a financial partner to the U.S. government.