Prices climbed 8.5% in March, compared to last year, amid growing fears of economic slowdown

Russia's war in Ukraine drove up energy prices even higher and policymakers launched a major effort to get soaring inflation under control as prices rose in March, the largest annual increase in four decades.

The Bureau of Labor Statistics reported Tuesday that prices rose 1.2 percent in March. The Federal Reserve and the White House were hoping that inflation would start to go down a few months ago. Russia's invasion, covid shutdowns at major Chinese manufacturing hubs, and the bleak reality that inflation continues to spread through every crevice of the economy dashed those projections.

Joe Brusuelas said that one cannot escape it even if they wanted to.

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Economists and analysts are increasingly concerned about a looming economic downturn. In March, analysts at Bank of America lowered their estimates for growth. The war in Ukraine is casting a lot of uncertainty over the world order, and the Federal Reserve recently lowered its GDP forecasts.

It is not clear how severe a slowdown could be. Fed officials say that the economy is in a strong position because of low unemployment and the strength of household balance sheets. The Fed will try to cool the economy down without causing it to contract.

The March inflation report was expected to be driven by energy prices. Russia's invasion triggered a slew of international sanctions that are intended to choke off Russia's economy and Putin's inner circle. Supplies of oil, wheat and other commodities are under new pressures because of attempts to isolate Russia.

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Last month, crude oil hit a new high, and gasoline prices followed. Even as crude prices ease up, sticker shock at the pump continues to stretch people's pocketbooks and sour their perception of the economy.

One of the most striking features of the recovery has been inflation, which has a direct impact on households across the country. Wage increases aren't always enough to cover the basics, as rents are rising and groceries are more expensive. Households aren't expecting a quick reprieve. The survey data from the New York Fed showed that consumers expected inflation to go up in the next 12 months. That was the highest reading since the survey began, and a steep month-to-month jump.

Self-fulfilling inflation can occur if households and businesses expect prices to go up in the future. Policymakers are rushing to get a hold of prices that have turned out to be nothing but a temporary weakness.

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In March, the Fed raised its rate for the first time in a decade and then planned six more hikes to keep up with rising prices. In the past few weeks, officials have said that there could be more aggressive hikes in the next few months.

The expectation going into this year was that inflation would peak in the first quarter and then decline, according to Fed Chair Powell. We may need to move more quickly if it continues to fall apart.

Inflation has cast a pall over Biden's approval ratings, with Republicans accusing Democrats of overspending. The release of 1 million barrels a day from the nation's Strategic Petroleum Reserve was one of the moves the White House made to lower prices. New policies will be rolled out by the White House to try to bring down gas prices. The EPA will allow the sale of a blend of gasoline that uses E15 this summer.

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Brian Deese, director of the National Economic Council, said on Monday that the price of oil has come down slightly but would be reflected in the latest inflation data.

At the end of the day, American families feel like prices are too high.

Andrew Van Dam made a contribution.