Hotter-than-expected inflation data, including the so-called “core” measure of inflation surging to a fresh 40-year high, have sparked a sharp upward revision to investor expectations for how high the Fed will hike rates as it struggles to quell price pressures.
Government data released on Oct. 13 showed that the annual “headline” rate of inflation edged down from 8.3 percent in August to 8.2 percent in September.
Core inflation, which strips out the volatile categories of food and energy, jumped from an annual 6.3 percent in August to 6.6 percent in September, a new four-decade high.
Both inflation gauges came in hotter than markets expected with the data prompting investors to raise their bets for Fed rate hikes….