So how’s that “transition” working out? Badly for you, me, and the Federal Reserve, according to the latest and most relevant measure of inflation. The Commerce Department reports that the PCE index, which measures the prices paid by consumers at point of sale, hit its highest level in four decades:

An inflation gauge that is closely tracked by the Federal Reserve jumped 6.8% in June from a year ago, the biggest increase in four decades, and leaving Americans with no relief from surging costs.

Friday’s figures from the Commerce Department underscored the persistence of the inflation that is eroding Americans’ purchasing power, dimming their confidence in the economy and threatening Democrats in Congress in the run-up to the November midterm elections.

And that increase is accelerating at a record pace, too:

On a month-to-month basis, prices rose 1% from May to June, faster than the 0.6% rise from April to May and the biggest such jump since 2005.

The government’s report also said that consumer spending managed to just outpace inflation, rising 0.1% from May to June after adjusting for price changes. Consumer spending has weakened in the face of high inflation. But it’s helping fuel inflation itself, with demand still strong for services ranging from airline tickets and hotel rooms to restaurant meals and new and used autos.

So demand has fallen off almost to a flatline level month-on-month, and yet we’re still seeing record inflation nonetheless. It’s now at its highest level since January 1982, according to CNBC’s Jeff Cox, and even without food and energy it’s up 4.8%. And don’t forget that gas prices slid downward in June, a point that the White House keeps hailing as a success even though the price of gasoline is still about two dollars a gallon higher than when Biden took office.

This matters for what we can expect from the Federal Reserve. This is the inflation metric on which they build their monetary-supply policies, not the CPI or PPI numbers. To get this down to 2% — the Fed target range — their interest rate would normally have to at least match and more likely exceed the PCE index rate. The Fed’s 75-basis point hike this month brought the rate up to a 2.25-2.5% range. Jerome Powell says he doesn’t anticipate raising rates again until September’s Fed meeting, but they’re at least 400 basis points short at the moment. That means we’re going to need a massive series of hikes that will likely stretch out to the end of the year before inflation gets under control — if it does by that time.