This page looks at the different components of annual inflation since March 2021. Most of the surge in prices has come from "transitory" components related to supply-demand imbalances. This includes energy, new and used vehicles and food inflation. However, "sticky" inflation has also strengthened and even on its own, sticky inflation is running above 2%. This includes things like rent, household furnishings, apparel and services sectors. Services sectors have seen some of the largest wage increases recently and it's likely these costs get passed to consumers. Looking forward, we expect commodity and supply-driven inflation to eventually subside. However, sticky inflation is robust enough to keep the Fed on a tightening track even when supply issues get worked out. On the right-hand side, we show how inflation expectations have begun to reflect this. Over the next five years, consumers, financial participants and professional forecasters all expect inflation to average at levels modestly higher than historically.