According to data released Tuesday by the Labor Department, consumer prices rose 8.5% in the 12 months ending in March, the fastest pace in four decades, following an unprecedented surge in gas prices last month.
It can be ruled out, but double-digit inflation later this spring is a stretch.
The previous month's increase of 0.8% was higher than the 1.1% economists were expecting.
The largest annual increase since 1981 was seen last month, with prices jumping 8.5%.
The government said that the overall increase was the result of gains across gasoline, shelter and food prices, and that a 18.3% monthly increase in the price of gas accounted for over half of the increase.
Despite the hot overall figure, the report also showed that the price of used cars and trucks fell 3.8% month over month after surging 35% over the past year.
The core inflation, which excludes volatile food and energy prices, rose in March, but at a slower rate than expected.
The tech-laden Nasdaq climbed 1% by 8:40 a.m., reversing early morning losses, after the report. Time.
The Federal Reserve is trying to combat the surge in inflation caused by rising energy prices, and stocks have struggled in recent months. The benchmark S&P 500 has fallen 8% this year. Russia's invasion of Ukraine complicates the economic outlook, as oil and gas prices all-time highs last month.
How high could prices go this year? Oil prices are still up 20% this year despite being down 20% from an early March high.
The Fed will act to fight inflation. The central bank's next two-day policy meeting ends on May 4, when officials are expected to announce how much they will raise interest rates.
A Fed official suggests that the central bank is fueling inflation by not raising rates.
There are warning signs as the Fed, War and Oil Threaten Economic Recovery.
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