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Consumer prices, as measured by the Consumer Price Index (CPI) soared in April. For the month prices in the all-item index gained 0.8% for a 12-month increase of 4.2%. The core CPI, which excludes volatile prices in the food and energy sectors, was up 0.9% in April and is now up 3.0% over the last 12 months.

But what’s it all mean?

Today the financial markets are taking the surprisingly high CPI inflation numbers as an indication that inflation has soared well above the Federal Reserve’s 2% target and is in danger of running out of control unless the central bank moves quickly–at say its June 16th meeting (the Fed doesn’t meet in May)–to signal an impending increase in benchmark interest rates now at 0% to 0.25%.

The Federal Reserve itself continues to say that the spike in prices is temporary, a result of glitches in the global economy as a result of the pandemic, and that inflation will settle back to something slightly above the Fed’s 2% target. Which would not lead the bank to raise interest rates because, in the Fed’s opinion, the economic recovery is still fragile.

In my opinion, the actual inflation picture lies somewhere in between. There is no doubt that the surprisingly high 12-month rate revealed in today’s numbers from the Bureau of Labor Statistics has been “inflated” by the drop in prices in April 2020 with the full onset of the pandemic and the resulting constriction of economic activity.

And there is no doubt that some of the April surge in prices is a result of increases in demand outstripping the ability or the willingness of businesses to increase supply. Businesses have been reluctant to invest in increases in supply until they were sure that increased demand would actually materialize.

But it’s also true that some of the price inflation looks likely to stick. Take copper prices, which have soared to a 10-year high. One of the big costs for copper miners is sulfuric acid, used to separate copper from rock. If a mining company locked in the price of acid in a long-term contract, the company is paying $60 a metric ton. On the spot market, the price has soared to $160 to $170 a metric ton. (Sulfur supplies from oil refiners have been down with the drop in demand for gasoline and other oil products during the pandemic.) Copper industry analysts see the price of sulfuric acid on the spot market dropping basic to $110 to $140 a metric ton. That’s a big drop from the current peak in spot prices but its not a full return to $60 in the long-term market.

I doubt that the Fed will say anything definitive about interest rates at its June meeting. The economic data are still too uncertain.

But inflation does look to be moving higher in reality. And that argues that the first interest rate increase from the Fed will come sooner than 2024 as market optimists have argued.