Inflation came in much hotter than expected, which is bad news for stocks, borrowers, and anyone hoping the Fed was done hiking.

• Headline inflation jumped at a pace that works out to over 7% a year, a huge miss versus forecasts.
• Half of all spending categories are now rising 3% or faster, the level that historically means more rate hikes.
• Markets went from pricing three more hikes to almost four, and October odds moved from one-in-four to a coin flip.
• Workers are losing ground as wages fall, so people are paying higher prices with less income — a setup for layoffs.
• Tariffs, the Iran conflict, and the big tax-and-spending bill are feeding the price pressure.

Outlook: A deal with Iran in late October is the main thing that could cool bond yields and spare markets a second hike in December.