US inflation since COVID-19 has made a full round trip and then turned up again: the 12-month CPI rate fell to 0.1% in May 2020, peaked at 9.1% in June 2022, cooled to 2.4% in January 2026 and was back at 3.4% in August 2026 [2][1]. Over the whole period, consumer prices rose 30.4% from December 2019 to August 2026 [2]. The Federal Reserve cut rates to near zero in 2020, raised them to 5.25% to 5.50% by 2023, cut again in 2024 and 2025, and on September 16, 2026 raised its target range to 3.75% to 4.00% [3][4].
2020: the COVID-19 shock and deflation fears
The first concern in 2020 was not inflation but collapsing demand. The unemployment rate jumped to 14.8% in April 2020, according to DataPorium's economic indicators [5]. The 12-month CPI rate dropped to 0.1% in May 2020 [2]. The Fed cut its target range by 50 basis points on March 4, 2020 and by another 100 basis points on March 16, to 0.00% to 0.25% [3], and it launched large asset purchases. Federal fiscal support was also very large and was financed mostly by borrowing.
2021 to 2022: how US inflation surged to 9.1%
Inflation returned quickly once the economy reopened. The 12-month CPI rate reached 5.4% in June 2021 and 7.0% in December 2021 [2]. The Fed kept its target range at 0.00% to 0.25% through all of 2021 [3]. The rate peaked at 9.1% in June 2022, and core CPI, which excludes food and energy, peaked at 6.6% in September 2022 [2]. Measured as an annual average, inflation was 8.0% in 2022, the highest yearly figure in DataPorium's series since 1981 [5].
What drove the surge
- Demand: near-zero rates and deficit-financed household support raised spending faster than supply could respond.
- Supply chains: shipping delays and parts shortages limited the output of goods such as cars.
- Energy: oil and gasoline prices rose sharply in 2022 after supply disruptions in Eastern Europe.
- Shelter: rents and home prices rose quickly, and housing costs feed into CPI with a lag.
The Fed responded with its fastest tightening in decades. It began with a 25 basis point increase on March 17, 2022, made four increases of 75 basis points from June to November, and ended 2022 at 4.25% to 4.50% [3]. From a sound-money view, the lesson is that policy stayed loose for too long after the recovery began. The counterpoint is that part of the surge came from supply shocks that no rate policy could have prevented.
Year-by-year US inflation table, 2020 to 2026
The table shows December-to-December CPI and core CPI changes, calculated from the BLS indexes published on FRED, alongside the federal funds target range at year-end [2][3].
| Year | CPI, December to December | Core CPI, December to December | Fed funds target range at year-end |
|---|---|---|---|
| 2020 | 1.4% | 1.6% | 0.00% to 0.25% |
| 2021 | 7.0% | 5.5% | 0.00% to 0.25% |
| 2022 | 6.5% | 5.7% | 4.25% to 4.50% |
| 2023 | 3.4% | 3.9% | 5.25% to 5.50% |
| 2024 | 2.9% | 3.2% | 4.25% to 4.50% |
| 2025 | 2.7% | 2.6% | 3.50% to 3.75% |
| 2026 (12 months to August) | 3.4% | 2.4% | 3.75% to 4.00% (after September 16) |
2023 to 2025: disinflation and rate cuts
The Fed raised rates four more times in 2023, reaching 5.25% to 5.50% in July, and held there for more than a year [3]. Inflation fell steadily: 3.4% in 2023, 2.9% in 2024 and 2.7% in 2025 on a December-to-December basis, while core inflation eased to 2.6% by December 2025 [2]. With inflation closer to target and the labor market softer, the Fed cut rates by a full percentage point in late 2024 and by another 75 basis points in September, October and December 2025, to 3.50% to 3.75% [3]. By January 2026, the 12-month CPI rate was 2.4% and core CPI was 2.5% [2].
2026: why US inflation turned back up
The improvement did not last. Headline inflation rose from 2.4% in February 2026 to a peak of 4.2% in May before easing [2]. The monthly path of the 12-month CPI rate in 2026 was:
- January and February: 2.4%
- March: 3.3%
- April: 3.8%
- May: 4.2%
- June: 3.5%
- July and August: 3.4%
The source was energy, not a broad price spiral. In the August 2026 report released on September 11, the energy index was up 16.3% over the year and gasoline was up 27.4%, while shelter rose 3.0% and food 2.7%. Core CPI rose only 2.4%, and the all-items index rose 0.4% in August alone [1]. Core inflation in 2026 has stayed between 2.4% and 2.9% [2].
The Fed still chose to act. With the effective federal funds rate at 3.63% in August 2026 [5], the policy committee raised the target range by a quarter point on September 16 by a 12 to 0 vote, stating that "inflation remains elevated" and that the move "will support a timelier return" to its 2% goal [4]. The concern is that a second energy-driven wave, coming only four years after the first, could lift inflation expectations if policy looks too relaxed.
What six years of inflation mean for savers and investors
A basket of goods and services that cost $100 in December 2019 cost about $130.40 in August 2026 [2]. Cash and savings accounts that earned near zero in 2020 and 2021 lost a large share of their purchasing power, while higher rates since 2022 have allowed savers to earn yields closer to inflation. Investors may consider real returns, meaning returns after inflation, as the relevant measure for long-term plans. DataPorium tracks CPI, the federal funds rate and related indicators on its economic indicators page, which is updated as new releases arrive.
US consumer prices rose 30.4% from December 2019 to August 2026, and the 2026 rebound to 3.4% inflation shows that the post-COVID-19 inflation cycle is not yet finished.
Frequently asked questions
What is the US inflation rate right now?
The Consumer Price Index rose 3.4% in the 12 months to August 2026, according to the BLS release of September 11, 2026. Core CPI, excluding food and energy, rose 2.4%.
When did US inflation peak after COVID-19?
The 12-month CPI rate peaked at 9.1% in June 2022. Core CPI peaked later, at 6.6% in September 2022.
How much have prices gone up since 2020?
The CPI rose about 30.4% from December 2019 to August 2026. Something that cost $100 before the pandemic costs about $130.40 now on average.
Why did inflation rise again in 2026?
The 2026 rebound came mainly from energy, with the energy index up 16.3% and gasoline up 27.4% over the year to August. Core inflation stayed near 2.4% to 2.9%, which suggests the increase has not yet spread broadly.
Sources & References
- [1] BLS Consumer Price Index Summary, August 2026 (released September 11, 2026)
- [2] FRED: Consumer Price Index for All Urban Consumers, All Items (CPIAUCNS), and core CPI (CPILFENS)
- [3] Federal Reserve: Open Market Operations, federal funds target range history
- [4] Federal Reserve Issues FOMC Statement (September 16, 2026)
- [5] DataPorium Economic Indicators: unemployment rate, inflation and federal funds rate
