U.S. inflation isn’t coming – it’s already here!

Real U.S. consumer price inflation is running at about 4% a year, well above the Federal Reserve’s 2% target and far higher than the 2.7% year-on-year increase reported for April and reflected in the yields of short-term inflation-indexed U.S. Treasury securities. That’s due to a quirk of U.S. inflation measurement, which includes home price inflation with a one- to two-year lag. Even worse, the explosion of U.S. home prices—now increasing at a bubbly 12% a year—portends even higher inflation for 2022. U.S. fiscal and monetary policy pushed $5 trillion of fiscal stimulus into an economy hobbled by supply constraints, creating…