What to know about inflation: Rising prices hit in U.S., around the world

The Federal Reserve building in Washington on Dec. 19. (Samuel Corum/Bloomberg News)

As the coronavirus pandemic enters its third year, families across the United States and even some other nations are feeling the pinch of price hikes of necessities including food, housing and energy, thanks to record-high inflation.

This means the cost of living is going up at the fastest pace in decades, affecting the price of things most households need and overshadowing the job and wage gains many Americans experienced last year.

‘That raise meant nothing’: Inflation is wiping out pay increases for most Americans

Here’s a guide to what is inflation — and why it’s tricky for governments and central banks to tackle.