Figures just released by the labour department show that US CPI rose 6.2 per cent year-on-year in October, the fastest pace since 1990.

Us stock futures fell after the data were released, while dollar and 10-year yields roseSuch a set of market reactions suggest that the market expects the Fed to raise interest rates ahead of schedule.. The dollar index is now up 0.3% to 94.28. The 10-year Treasury yield rose 3 basis points to 1.469%. Gold, on the other hand, is up 1 per cent to $1849 and is generally supported in a stagflation environment.

"used car prices, air ticket prices and hotel rates are all rising, and we are seeing some unusual distortions," said Diane Swonk, chief economist at Grant Thornton. You may see some service prices soar, while the prices of used cars rebound and the prices of new cars rise as demand rises with the summer hurricane floods.

The price of used cars was the main culprit for the rise in inflation in the United States this spring. These figures fell in the summer and fell last month, but are likely to pick up again, Swonk said.

The recent surge in US consumer prices has been sharper and longer-lasting than many economists and the Fed initially expected. Inflation has become the biggest concern for stock market strategists, who say that continuing to climb or become more sticky could prompt the Fed to accelerate its exit from its bond-buying program and raise interest rates early.

"the main theme of the past few months has been that inflationary pressures seem to be growing," said Stephen Stanley, chief analyst at Amherst Pierpont. The sharp rise this spring was driven by only a few categories. "

"A lot of things are rising, whether it's the cost of housing or other types of services, such as entertainment," he added.

Home prices account for about 1/3 of CPI and are already rising. In September, rents rose 2.4% from a year earlier, while landlord rents rose 2.9% from a year earlier. "they are accelerating and there are a lot of driving forces," Swonk said. According to the apartment list (Apartment List), the national median rent has risen by 16.4% since the beginning of the year.

Swonk expects inflation to peak in the first quarter and then start in March, making it easier to compare with the same period a year ago. "year-on-year comparisons are starting to decline and we will begin to see a slowdown in growth," she said. She added that the extent of the slowdown depends on rents and health care costs.

Inflationary pressures are largely blamed on supply chain problems and the rising cost of commodities, especially oil. Stanley said he did not expect the high year-on-year increase in the consumer price index to abate until the spring.

"what the Fed is worried about is that they think used car prices and air ticket prices will soar in the next three to four months and then return to normal levels," Stanley said. What we are seeing is that the second wave of inflation seems to be more widespread and that sharp wage increases have also played a supporting role. "

He added: "when these commodity prices rise sharply like this, they usually fall back after the rally dissipates. "but when the wage level accelerates, the wage level will not reverse, but the rate of wage growth may be normalized. "

Mr Stanley said inflation proved to be longer-lasting than he initially expected. He gives an example of the car market: it is difficult for manufacturers to produce enough cars because of components, especially semiconductors.

"when you go back and listen to the automakers, it always takes us two or three months to solve the chip problem, and now a year later, things are as bad as ever," he said. "No one expected this scale. In response to the epidemic, policymakers adopted the loosest fiscal policy ever and the loosest monetary policy ever. "