After more than a decade of hovering at normal to-below-average levels, inflation became a hot topic again in 2021 when it rose to over 4%. By March 2022, it had hit a 40-year high of 8.5%. This prompted the Federal Reserve to take its usual course of action to combat inflation: raising short-term interest rates. Over the next 18 months, the Fed hiked rates at a historically aggressive pace. As usual, this created extreme volatility in the financial markets, but ultimately inflation did come down again to just over 3% by late 2023.

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