Inflation is spreading deeper into the U.S. economy, slamming the door on hopes the Federal Reserve will dial back interest-rate hikes that threaten to tip the country and perhaps the world into recession.
Core inflation, excluding food and energy, jumped to a 40-year high of 6.6% in September from a year ago ¡ª outpacing forecasts and triggering a slide in U.S. bond markets, as investors bet that the Fed will be forced into two more 75 basis-point increases this year.
That spells trouble for a U.S. economy that¡¯s already been slowing down, as soaring prices eat into paychecks while higher borrowing costs crush the housing market. Thursday¡¯s inflation report showed how broad price pressures are, with big jumps in the cost of food, shelter and medical services.
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