Five months ago, inflation was 2.4%. Economists were writing headlines about “the last mile” — how close we were to getting back to normal. Rate cuts were back on the table. Your grocery bill had finally stopped getting worse.

Then on February 28, the Strait of Hormuz closed. And everything changed.

Yesterday’s CPI report — the one the Bureau of Labor Statistics released Wednesday morning — showed prices rising 4.2% year over year. That’s the highest reading in three years. Gasoline is up 40.5% from a year ago. Energy costs overall are up 23.5%. And here’s the number that really tells the story: energy alone accounted for more than 60% of the entire monthly price increase.

Now... most people will look at 4.2% and panic. That’s the wrong reaction. What they should do is pull energy out and look at what’s underneath. Core inflation — everything except food and energy — rose just 0.2% for the month. Shelter costs, the biggest line item in the whole index, cooled to 0.3%. That’s actually decent.

So this isn’t 2022, when everything was going up at once. This is an energy shock — one single event, the Strait of Hormuz, sending a spike through the entire economy. The problem is, you can’t strip energy out of your gas tank. You can’t strip it out of your electric bill. You can’t strip it out of the trucking costs that show up in the price of everything at the grocery store.

That’s the real story. The underlying economy isn’t overheating. One chokepoint, 21 miles wide, is doing this to 330 million Americans. And until it reopens, every month’s CPI report will look like this one.

If you haven’t looked at what rising energy costs are doing to your monthly budget, this is the week to do it. Gas, electric, groceries — add them up for January versus May. That gap is real. And if you have a fixed-income portfolio with no inflation protection built in, now’s the time for that conversation with your advisor. Not next month. This week.