The September CPI data released Thursday morning came in hotter than expected, with food and housing prices exerting the most pressure on Americans. University of Cambridge Janeway professor of financial economics Constantine Yannelis joins to discuss his outlook on the current economic environment.

Yannelis acknowledges that home prices continue to rise faster than headline inflation. While he notes "the good news" is that home price growth has been decelerating, "homeownership remains out of reach for many American households." With high inflation and interest rates, Yannelis explains that the environment is challenging for first-time homebuyers to manage mortgage payments, stating, "I really don't think we're going to see it become much easier" until the federal funds rate begins to decrease significantly.

Read more: How the Federal Reserve rate decision affects mortgage rates

Regarding monetary policy, Yannelis observes that the Federal Reserve is in a holding pattern. "The Fed is waiting to see what the data says," he states. "The president of the New York Fed, John Williams, recently said that we should reduce rates but over time. The big question here is what does overtime mean, and how quickly will the Fed cut rates?"

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This post was written by Angel Smith.