The causes of inflation are often mysterious. Inflation can have wide-ranging effects. First, it makes business decisions and investments uncertain. If prices are changing, it's tricky for two firms to enter into a long-term contract. It's also difficult for people to plan for retirement, because they can't be sure how much their money will buy.
Inflation hurts people on fixed-incomes because it means they can buy less.
It tends to discourage saving and investment because when inflation hits, people rush to buy things before prices go up further. Inflation also tends to benefit people who owe money and hurt people who lend it. As prices rise over the life of a loan, the money lent out loses value. If the latest round of rate increases has produced another soft landing, it would mark the first time the central bank has succeeded in slowing but not stopping a boom twice during the same expansion. Usually, inflation or excessive interest rate hikes would have killed a boom by now.