• Higher-than-expected inflation in August means the Fed will likely back another jumbo-sized rate hike next week.

• Rate increases have already made mortgages, car loans, and credit cards much pricier for Americans.

• Markets now expect larger hikes into 2023, leaving households to brace for more economic pain.

Since the beginning of 2022, it's gotten way more expensive to take out a mortgage, hold credit card debt, or get a loan of any kind.

New data suggests the surge has only just started — and it could add even more pain in the form of job cuts and smaller raises.

The Federal Reserve's inflation fight hit a fork in the road when the Consumer Price Index was updated on Tuesday. Had inflation cooled more than expected in August, the central bank might've eased up on its interest rate increases and the economy just might've avoided a growth recession.

That didn't happen. Inflation slowed, but only barely. The year-over-year rate eased to 8.3% from 8.5%, but prices rose 0.1% through August alone, accelerating after holding flat the month prior. Fed officials have been clear that they'll only pull back on their rate hikes once they see "compelling evidence" that inflation is slowing down. The August report doesn't come close to matching that description.

There's "no chance now" of the Fed slowing its roll and raising rates by only half a percentage point, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said. Markets, economists, and analysts see another 0.75-point hike — the third in a row — as all but certain.

Interest rates serve as the Fed's best tool for slowing the rate of price growth. Higher borrowing costs tend to slow economic growth, as Americans rein in their spending and businesses slow their plans for expansion. Demand drops, supply catches up, and the pressures driving prices higher ease.

Higher rates also place greater pressure on the labor market. Companies tend to curb their hiring plans and issue smaller raises when borrowing is more expensive. Waning demand can even lead to significantly lower revenues and prompt companies to cut jobs altogether.

The Tuesday inflation print didn't just change the calculus for the Fed's September meeting. Economists are now bracing for a much more aggressive hiking cycle through the rest of the year, complete with more jumbo-sized hikes and little sign of a slowdown.

For the average American, that's going to mean expensive loans, smaller raises, and a heightened risk of job loss.

The Fed's rate-hike plans just got much more aggressive

In just one week, bets on how the Fed will raise rates swung much higher. Traders now expect a considerably more aggressive hiking cycle through the end of 2022.