A three-decade high in inflation sows concerns about America’s recovery

Nevertheless, optimism that supply kinks would be ironed out by now has vanished. Inflation is even hotter in America than in other countries because of the strength of the rebound there, with stimulus payments fuelling demand. Price pressures are getting broader. A gauge of core inflation, stripping out volatile food and energy prices, rose by 4.6% year-on-year in October, more than twice its trend rate of the previous quarter-century.

In truth there ought to be little chance of a wage-price spiral in America. A sharp narrowing in the fiscal deficit will constrain growth in the coming quarters. And, crucially, investors still expect the Fed to take decisive tightening action if necessary, which is why longer-term bond yields have not moved much. Last week the Fed announced that it would start, the first step to unwinding its ultra-loose policies implemented at the height of the pandemic.

Politically, this is treacherous territory for President Joe Biden. His week had got off to a great start with the passage of America’s biggestin decades, giving him something to crow about. On November 10th, shortly after the inflation data were published, he instead chose to adopt a defensive posture. “Inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me,” he said.

Yet inflation is, ultimately, out of Mr Biden’s hands. The government can only do so much to paper over. Knowledge that the Fed may feel compelled to raise rates before too long will offer Mr Biden little consolation. Historically, growth cycles tend to come to an end when the central bank tightens policy, so today’s price pressures may augur economic disappointment a little farther down the road. Mr Biden, a teetotaller, cannot even soothe his sorrows with a modestly cheaper bottle of lager.

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