Precedent · Monetary
The Post-COVID Inflation Surge
2021–2023
The 2021-23 inflation surge. US CPI rose from ~1.5% to a 9.1% peak in June 2022 on supply-chain snarls, fiscal stimulus, and an energy spike — ending four decades of disinflation and forcing the fastest hiking cycle since the 1980s. This is the inflation side of the 2022 shock; the policy response is the Rate Shock precedent.
The signature
Each variable's peak deviation from the pre-event baseline, with the curve shape, the lag before it moved, and how long the recovery ran.
| Variable | Peak deviation | Shape | Lag / Recovery | Confidence |
|---|---|---|---|---|
| Brent Crude Energy spike, peaking 2022 | +80% | Spike | 60d lag · 365d | high |
| CPI Inflation ~1.5% to 9.1% peak Jun-2022 | +250% | Ramp | 0d lag · 720d | high |
| 10Y-2Y Curve Curve inverted as policy responded | −120% | L | 180d lag · 540d | high |
Methodology
CPI ramped hard and broadened from goods into services and shelter; commodities and energy spiked; then long rates rose and the curve inverted as policy responded. The signature is broad, persistent inflation — wages + services + shelter, which is far stickier than a one-off commodity spike. Shapes: ramp (CPI), spike (energy), L (curve inversion as the response set in).
What's different now
Read for the stickiness of services and shelter inflation once it embeds — the last mile down is the hardest, and the market repeatedly under-priced it. Pairs with the Rate Shock precedent as cause -> response: this records what got loose; that records what it took to corner it.