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US inflation rose 8.5% in March compared to the same time last year, the largest such increase since December 1981. It also marked the fifth straight month inflation hit a new 40-year high.

The consumer price index, a proxy for inflation that tracks the price of a basket of goods and services, rose 1.2% over February, the highest monthly increase since September 2005. Higher inflation means consumers can buy fewer goods with each dollar they spend (see 101). Housing, food, and gas prices—with the latter partially driven by the Ukraine crisis—were the largest contributors to the increase in the index. See data broken down by product here.

To curb inflation, the Federal Reserve raised interest rates last month and is expected to do so a number of times through the rest of the year. It typically targets an annual inflation near 2%. Read more on the link between inflation and interest rates here.