Share this article!

Inflation jumped to an annual rate of 8.6 percent in May, the U.S. Labor Department said Friday. That’s one of the loftiest levels since the stagflation days of the early 1980s — and the hot reading means mortgage rates are likely to keep rising in the near future.

“So much for the idea that inflation has peaked,” says Greg McBride, Bankrate’s chief financial analyst. “Consumer prices blew past expectations.”

The unexpected strength of inflation means the Federal Reserve is likely to keep raising rates this year in an effort to contain consumer prices. While the Fed doesn’t directly control mortgage rates, its policies do have an effect.