EXPLAINER: Why US inflation is so high, and when it may ease

At first, it didn’t even register as a threat. Then it seemed like a temporary annoyance.

Now, inflation is flashing red for the Federal Reserve’s policymakers — and delivering sticker shock to Americans at the used car lot, the supermarket, the gas station, the rental office.

On Wednesday, the Labor Department reported that consumer prices jumped 7% in December compared with 12 months earlier — the hottest year-over-year inflation since June 1982. Excluding volatile energy and food prices, what is called “core” inflation rose 5.5% over the past year, the...