Inflation came in hotter than expected and wages are falling behind, which is bad news for workers, borrowers, and anyone hoping for lower rates.

• Prices rose faster than forecast, pushed mainly by energy — fuel oil is up more than 70% and gas up about a third over the year.
• Real wages fell for the sixth straight month, so people are working more hours and still losing ground.
• Government bond yields are climbing past 5%, pushing mortgage rates toward 7.5% and higher.
• The White House is calling the numbers great and pointing to bank CEOs who see no trouble, while regular people say it feels like the worst economy in generations.
• Layoffs are spreading into strong companies — Netflix is cutting 6% of its staff — and AI borrowers like CoreWeave are getting punished as debt costs spike.

Outlook: With the Gulf conflict still disrupting oil tankers and energy prices feeding into everything else, inflation and borrowing costs look set to keep rising.