Markets This Week: Inflation Holds, Mortgages Ease (a Little)
The latest economic snapshot shows steady inflation, high-but-not-spiking rates, and a housing market still wrestling with expensive borrowing costs. Here’s the breakdown.
Inflation: Still steady, but not cooling fast
CPI is at 321.5, with Core CPI at 327.6. PCE sits at 126.56 (core at 125.93), and annual inflation is 2.7% for the year ending June — slightly higher than the prior 2.4%.
Inflation expectations:
- 1 year: 2.79%
- 5 years: 2.37% (market: 2.44%)
- 10 years: 2.33% (market: 2.38%)
- 30 years: 2.44%
What this means for you:
Prices aren’t accelerating, but they’re not retreating quickly either. Rate cuts from the Fed? Still not on the immediate horizon.
Rates & Yields: Holding the line
- Federal Funds Rate: 4.33%
- Treasury yields: 1 year at 3.92%, 5 years at 3.79%, 10 years at 4.23%
- 30-year fixed mortgage: 6.63% (down from January’s 7% peak)
What this means for you:
If you’re a borrower, mortgage rates have eased from earlier in the year, but financing a home is still pricey. Savers can keep locking in solid short-term yields on CDs and Treasuries.
Stocks: Modestly up
The S&P 500 closed at 637.18 (+0.78%). The overall market tone is steady, with no big swings in inflation expectations or earnings surprises.
What this means for you:
Index fund investors likely saw a mild gain this week. The absence of major market drama is good news — at least for now.
Key developments
- The FOMC continues to hold rates steady at 4.33%, with an eye on inflation and labor market data.
- Mortgage rates have backed off January’s highs but remain elevated compared to recent years, keeping housing affordability tight.
The bottom line
Inflation is hanging in there, rates aren’t budging much, and mortgages are expensive but not at their worst. For now, markets are in “steady as she goes” mode — but all eyes remain on upcoming economic data to see if that holds.