Mortgages and credit cards are about to get even more expensive. It's nothing compared to what we'll see by the end of the year.

• 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.

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.

Market positioning last week signaled a 76% probability of a 0.5-point hike, according to data from CME Group. A slim majority now sees officials raising rates by another 0.75 points in November to a range of 3.75% to 4%.

Market bets signal the Fed won't stop there. CME data pegs the odds of a half-point hike in December at 40%. A week ago, options positioning signaled 75% odds that rates would only climb by a quarter point at that meeting.

In short, investors are now girding for two more 0.75-point hikes and a 0.5-point increase to close out the year. That will leave rates half of a percentage point higher at the end of 2022 than was expected just one week ago. After weeks of hawkish language from Fed officials and a disappointing inflation report, it seems the market is finally coming around to the central bank's "go big or go home" outlook.

"The Fed has made it clear they won't be taking any chances, even if that increases the risk of over-tightening," Pantheon's Shepherdson said.

That tightening is already having an effect on Americans' finances. Mortgage rates rose last week to the highest level since 2008, further eroding home affordability in the already strained housing market. Credit card rates have moved sharply higher through 2022 and ratcheted up the interest payments for those with hefty debts. And since it usually takes around one year for rate hikes to be fully felt throughout the economy, those tightening effects are set to only get more intense.

Fed officials have also made it clear that they want to avoid the biggest risks that come with monetary tightening. Powell warned in August that cooling inflation with large rate hikes will "bring some pain" to households and businesses in the form of a less advantageous job market and pricier loans. That discomfort will probably still be worth it in the long run, he added.

"These are the unfortunate costs of reducing inflation, but a failure to restore price stability would mean far greater pain," Powell added.