The rising costs for food, gasoline, housing and other necessities have pushed the consumer price index up to an 8.5% annualized rate, the Department of Labor said last week. That’s the sharpest year-over-year increase since 1981.

Price increases are linked to choked supply chains, heavy consumer demand and the disruption to food and energy markets from Russia’s war with Ukraine. From February to March, inflation rose 1.2%, the biggest monthly increase since 2005.

Bank of America is warning that high inflation is a real threat to the economic recovery which began only two years ago.

“‘Inflation shock’ worsening, ‘rate shock’ just beginning, ‘recession shock’coming,” Bank of America chief investment strategist Michael Hartnett wrote in a note to clients on Friday. Inflation is “out of control,” he said, adding: “Inflation causes recessions.”

Earlier this month, Deutsche Bank became the first major bank to forecast a recession, predicting that the Federal Reserve’s increase of interest rates to fight inflation will push the economy into a “mild” downturn that begins in late 2023.

Hear more on inflation and what’s ahead for the economy on May 11 at AWB’s Spring Meeting, where economist Christopher Thornberg will give the morning keynote. Learn more and register here to attend in-person or virtually.