The consumer price index in the United States rose 8.5 percent year-on-year in March, hitting a new 40-year high again.

Many attribute that to the influences of the Russia-Ukraine conflict. But the actual causes are more than that. The inflation in the US was already serious before the flareup of the Ukraine crisis.

Although the Ukraine crisis has undoubtedly aggravated it, the CPI had started to rise in the US in early 2021, hitting 7.5 percent in January that year.

It is because of the continuous sharp rise of money supply and the formation of highly liquid M1 that the increase of the CPI in the US exceeded 5 percent from May 2021, and has been running above 5 percent since then.

In terms of fiscal deficit, data from the US Treasury Department show that the fiscal deficits in fiscal years 2020 and 2021 were $3.13 trillion and $2.77 trillion respectively, the first and second highest in history, and the US' fiscal-deficit-to-GDP ratio was as high as 15.2 percent and 12.4 percent. The total US government debt topped $30 trillion at the end of 2021 as deficits remained at record levels for two consecutive years.

The main cause of the US inflation is the aggressive monetary and financial policies the US has adopted. From May 2020 to March 2021, the M1 in the US surged more than 300 percent on a monthly basis on average, and the M2 more than 20 percent.

Consumer prices in the US have risen more than in the euro area, which was more directly affected by the Russia-Ukraine conflict. If the main driving force behind the acceleration of inflation was the increase in oil and gas prices caused by the conflict between Russia and Ukraine, then the European countries that are more directly affected by the conflict should have more severe inflation than the US.

But so far, among the US and major countries in Europe, the US inflation is the most serious, and the rate of increase in the consumer price level exceeds that of most major European countries.

The high inflation in the US and Europe has spread to many developing countries. The root cause is that the US and Europe have adopted aggressive monetary and fiscal policies that have resulted in a gap between supply and demand, as the rebound in demand has outpaced that of supply.