Latest Inflation Report Points to an Uncertain Path Ahead for the Fed and Mortgage Rates

Takeaway: A higher-than-expected inflation report has markets anticipating a Fed rate hike next Wednesday, but there’s more room than usual for markets to be surprised. Overall and core inflation both came in somewhat high with no obvious statistical distortions. Overall CPI inflation was 0.4% month-over-month (3.4% annually), largely driven by higher gas prices.