Nearly three-quarters of the month-on-month increase in CPI in March came from record increases in gasoline prices. Energy prices surged 10.9% annually, which is the core culprit behind the overall inflation drive.

But looking back at core consumer prices, which exclude food and energy, rose by just 0.2 per cent month and 2.6% year-on-year, both figures are below market expectations. The core CPI is expected to be 0.3% on a monthly basis, but in reality it is only 0.2%, yearly expected to be 2.7%, and in reality it is only 2.6%. That is to say, this price increase is essentially energy inflation triggered by external supply side shocks, rather than structural wage spiral inflation.

This is crucial. Goldman's global inflation forecast has made it clear that the nominal inflation represented surged above 3.2% due to the energy shock caused by the war, but the core inflation represented was holding steady at around 2.3%.