The Federal Reserve seems to take for granted its ability to stop inflation cold. The data tell a very different—and dangerous—story. Inflation is hurtling forward and could become a runaway train.

Slow to get on board, the Fed has finally abandoned its previous nomenclature of “transitory” inflation. The mounting evidence is too much for Fed Chair Jerome Powell to ignore and he vows to “prevent higher inflation from becoming entrenched.” That rhetoric may be too little, too late.

Entrenched is no longer the best word for the inflation conundrum. While it correctly implies that inflation has staying power and will be with us until the Fed gets its act together, the word also has a stationary connotation that doesn’t quite fit.

Instead, inflation has momentum.

With the consumer price index (CPI) running at a four-decade high of 7.0%, Powell has been asleep at the switch with America’s monetary system.

The December CPI numbers are especially troubling, not only because they are at the highest level since June 1982, but because they are end-of-year numbers, which are used as the benchmark for contract negotiations, government pension increases, union wage scales, and innumerable other decisions.

The December figure is more likely than any other month to fuel what is known as a wage-price spiral that helps embed inflation expectations into the economy. When businesses are faced with higher wage demands, they raise prices to compensate. In turn, workers demand even higher wages because prices continue rising.

Meanwhile, the producer price index (PPI) is running even hotter. After setting eight consecutive record highs in 2021, the PPI hit 9.7% in December 2021, the largest calendar-year increase in the index’s 12-year history.

Producer prices measure inflation at the wholesale level. Because all producers are facing these rising costs, businesses pass those costs on to consumers. That is why the PPI can foreshadow price increases at the consumer level.

Even after passing those price increases on to consumers, however, businesses do not get away unscathed. Consumers have relatively less real disposable income because of inflation and businesses then see real sales decline. Inflation is a tax on everyone.

What is particularly worrisome about the PPI is just how much inflation seems to be coming down the tracks. While retail gasoline has skyrocketed 50.8% in the last year, wholesale gasoline is up 65.8%, meaning retail prices have another 15 percentage points to go before returning to an equilibrium.

By the same reasoning, home heating oil will rise another 11.2 percentage points, chicken by another 52.8 percentage points, and pasta by about 50 percentage points. Retail prices for eggs are poised to rise 70.8 percentage points.

Other component changes in the PPI over the last year will put even more upward pressure on food prices. Nitrogenates and phosphates, the primary components of agricultural fertilizers, have increased in price by 107.1% and 91.7%, respectively, at the wholesale level.

Higher costs of food production will directly increase the cost of food—that is basic economics.

If that food goes in a can, the price will go even higher since metal costs soared in 2021. Wholesale inflation for scrap aluminum was 52.1%, iron and scrap steel 37.6%, and steel mill products 127.2%. These increases will work their way down to the retail level, giving inflation more momentum.

Inflation has become so rampant in the Census Bureau’s wholesale, retail, and manufacturing  trade reports, along with other economic indicators, that the Atlanta Fed’s estimate of fourth quarter real economic growth has fallen to just 5%—about half where it was at the beginning of December.

It appears inflation is already well entrenched in the American economy. Like a malignant cancer, it can no longer be easily and quickly rooted out. Given the lags involved in monetary policy, the time to put the brakes on inflation was a year ago. Not to be deterred, the Fed is still purchasing securities, growing its balance sheet, and creating more inflationary impetus.

Price increases in the coming months have all the momentum of a freight train, something that the Fed cannot stop on a dime.