Joe Biden was dealt twin economic blows ahead of the US midterm elections on Thursday after mortgage rates hit a 20-year high and underlying price pressures reached levels last seen in 1982.
The headline US inflation rate cooled for a third month in a row to 8.2pc but underlying price pressures continued to build.
Core inflation – which excludes volatile food and energy prices – unexpectedly picked up from 6.3pc to 6.6pc, the highest level since 1982.
It came as Freddie Mac revealed that the average mortgage rate for a 30-year fixed loan jumped to 6.92pc last week, the highest level since 2002.
The figures will increase the pressure on the US president ahead of next month’s midterms, with the Democrats on track to lose control of at least one chamber of Congress. Mr Biden has dismal ratings on his handling of the economy after the surge in prices.
Mr Biden said he had made “progress” fighting inflation but admitted that prices were “still too high”.
“Fighting the global inflation that is affecting countries around the world and working families here at home is my top priority,” he said in a statement after the inflation figures were released.
US stocks took a tumble in early trading before recovering as the figures boosted the odds of the Fed taking more aggressive action to tame inflation.
The S&P 500 fell by as much as 2.4pc before quickly clawing back the early losses. Nonetheless, markets expect the Fed to raise interest rates to almost 5pc within the next 12 months.
Michael Pearce, US economist at Capital Economics, said the figures “nails on” the fourth consecutive 0.75 percentage point increase in interest rates at its November meeting.
He said: “[It] suggests that the Fed may need to continue raising rates at that pace in December and perhaps beyond too.”
Seema Shah, chief global strategist at Principal Asset Management, added: “The composition of the inflation reading is perhaps even more worrisome than the overall number.
“Increases in shelter and medical care indices, the stickiest segments of the CPI basket, confirm that price pressures are extremely stubborn and will not go down without a Fed fight.”
It came as the International Energy Agency (IEA) said a decision by oil cartel OPEC+ to cut crude output to prop up prices risks plunging the global economy into recession.
“The relentless deterioration of the economy and higher prices sparked by an OPEC+ plan to cut supply are slowing world oil demand," the Paris-based agency said in its monthly oil report.
“With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession,” the IEA, which includes the US and other major oil consuming countries, added.
OPEC+ – which includes major producers such as Saudi Arabia and Russia – announced last week they plan to slash production by 2m barrels per day from November.
Mr Biden vowed unspecified “consequences” for relations with Saudi Arabia after the OPEC+ move, but Riyadh rejected criticism and said the move was not political and aimed at balancing the market and curbing volatility.
A White House official on Wednesday night accused Saudi Arabia of “coercing” other Opec members into production cuts.
National Security Council spokesman John Kirby said: “Other Opec nations communicated to us privately that they also disagreed with the Saudi decision, but felt coerced to support Saudi’s direction.”
Actual supply losses will likely be around 1m barrels per day and not the 2 million barrels announced by OPEC+, according to the IEA.
Capacity constraints plaguing output in other OPEC members mean Saudi Arabia and the United Arab Emirates will deliver most of the reductions, it added.
September's increase in consumer prices was driven by a 43pc jump in airfares and a 20pc rise in energy costs compared to a year earlier.