Inflation Calculator: Charting the Impact on Investments

How to Calculate an Inflation Rate

The basic formula to figure out price inflation (or deflation) is this:
(Price B - Price A) ÷ Price A x 100 = Inflation Rate

Let’s use a real-world example. The price for a dozen grade A large eggs was $3.37 in October 2024, according to the Federal Reserve Bank of St. Louis.¹ By March 2025, the average price was $6.23.

So the rate of inflation for a dozen eggs, using the formula above, is:
$6.23 – $3.37 = $2.86
$2.86 ÷ $3.37 = 0.85
0.85 x 100 = 85%

Or, the price of a dozen eggs rose 85% from October 2024 to March 2025.

Historical Inflation Rates

Prices rise and fall for various reasons. For example, during the Great Depression, there were years of deflation, the worst being 1932 when annual prices were down -10.3%. There was significant inflation during the 1970s and early 1980s, the worst year being 1980 when inflation hit 13.5%, according to the Federal Reserve Bank of Minneapolis.²

In 2022, U.S. consumers saw the largest inflation increase in 40 years, driven by the COVID-19 pandemic—which disrupted global supply chains and raised the costs of goods and services—as well as the war in Ukraine, which buffeted global energy prices. Inflation topped out at 9.1% in June 2022.³

From 1913 through June 2026, the average annual rate of inflation has been 3.25%.² Since 2012, the Federal Reserve has targeted a 2% annual inflation rate in its monetary policy.⁴

How Are U.S. Inflation Rates Measured?

Of course, the price of eggs does not measure the entire U.S. economy. To measure that, we depend upon the Consumer Price Index (CPI) published by the Bureau of Labor Statistics, which measures the average price increase of a wide basket of goods and services, ranging from groceries and gas to the price of housing and new or used vehicles.

The CPI is reported monthly and, in aggregate, shows the base amount required to purchase the same goods and services compared to a year ago.

Basic Types of Inflation

Economists generally agree on three scenarios that lead to inflation.

Extreme Cases of Inflation

Since the pandemic, the U.S. economy has experienced a combination of all three types of inflation listed above. But there are other, more significant levels of inflation that may signal a potential economic collapse.

^{¹Federal Reserve Bank of St. Louis, “Average Price: Eggs, Grade A, Large (Cost per Dozen) in U.S. City Average.” Accessed June 2026.
²Federal Reserve Bank of Minneapolis, “Consumer Price Index, 1913-2026,” accessed June 2026.
³U.S. Bureau of Labor Statistics, “Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years.” July 18, 2022.
⁴Federal Reserve Bank of Atlanta. “The Fed and Inflation: Origins of the 2 Percent Target Rate.” April 1, 2026.}