Post-pandemic global inflation surge

Inflation began accelerating in mid-2021 as pandemic-era stimulus met constrained supply chains, labor shortages, and a shift in spending from services toward goods; Russia's 2022 invasion of Ukraine then added a sharp energy and food-price shock on top. US inflation peaked above 9% in mid-2022, the highest in four decades, while eurozone inflation peaked above 10%, driven especially by natural gas prices following the cutoff of Russian pipeline supply. Central banks responded with the fastest synchronized rate-hiking cycle in decades — the US Federal Reserve took its policy rate from near zero to over 5% in about 17 months — which helped bring inflation down substantially by 2023-2024 but also raised borrowing costs sharply for households, businesses, and governments worldwide.