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Welcome to the inquiry with me, Tanya Beckett. One question for expert witnesses and an answer.

Prices are shooting up all over the globe for food, fuel and energy. Even tomato ketchup we've

been warned may not escape a price hike. Inflation has been low in major economies for years,

but now it's running at a rate not seen in decades. Is this a temporary blip or a more permanent

change and should policymakers be less reluctant to use a rise in interest rates to bring it under

control? This week on the inquiry we're asking, should we be worried about the return of inflation?

Part 1 Signs of inflation

Our first expert witness is Claudia Sam, senior fellow at the Jane Family Institute,

a research organisation which looks amongst other things at social wealth.

How high is inflation in America when you put it into a historical context? Right now in the United

States inflation, year over year is running at the highest level we have seen in decades.

And that level is currently around 6%. Claudia used to work as an economist for America's Central

Bank the Federal Reserve which sets interest rates so she has a lot of experience in keeping a close

eye on the twists and turns in the economy. Inflation picked up in the United States in the late

spring early summer of 2021. Claudia says as the pandemic appeared to ease, there was a rush to

buy certain goods which pushed prices higher. Some of the areas where it came first were

used cars, electronics. So those were some of the first areas and they were very unusual.

Right, used cars do not normally add much to inflation and frankly goods don't either.

As the economy opened up we did see Americans go back to driving and traveling and so some of the

prices that had been really low last year made a pretty quick rebound. Cars were not the only

...