The Consumer Sentiment report was the largest release in an otherwise light week. The report showed that sentiment has improved over the last couple of months. However, this improvement comes against the backdrop of consumer sentiment having dropped more than 30 points since January and remaining at relatively low levels throughout the year.

With inflation remaining stubborn and impactful, it is no surprise that consumer sentiment has taken a hit. The Federal Reserve’s balance sheet has shed some of its weight but continues to reflect significant borrowing amid persistent inflationary pressures. There is strong speculation that another rate increase may be announced at next week’s rate decision.

Consumer Sentiment
The University of Michigan Consumer Sentiment index was revised higher to 49.5 in June 2026, up from a preliminary reading of 48.9, although it remained slightly below forecasts of 50. Still, sentiment improved from 44.8 in May, the lowest level on record, supported in part by a moderation in gasoline prices. The expectations gauge was at 50.7, the highest in three months, compared to 49.3 in the initial estimate, as consumers’ worries over long-term consequences of the Iran conflict appear to be easing.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.03%, bringing the current rate to 6.68%.
• 30-Year FRM rates saw a decrease of -0.08%, leaving the current rate at 7.32%.

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.01%, with the current rate at 6.98%.
• 30-Year VA rates saw a decrease of -0.02%, with the current rate at 6.99%.

Jobless Claims
Initial Claims were reported to be 194,000 compared to the expected claims of 200,000. The previous week landed at 200,000.

What’s Ahead
On deck next week are the Core PCE Index—the Federal Reserve’s preferred measure of inflation—personal income and spending data, and the FOMC’s interest rate decision.

Inflation numbers are in and came in much higher than expected. Even the core inflation numbers for both reports were higher than anticipated. Core inflation is intended to exclude some of the most volatile components, including food and energy costs, painting a picture in which the Federal Reserve will need to continue its tightening measures until inflation is under control.

In particular, the Producer Price Index (PPI) showed a significant increase above expectations, impacting businesses and potentially trickling down to consumers over time. The retail sales report also confirms that consumers have significantly slowed their purchases compared to the previous month.

Consumer Price Index
The annual inflation rate in the US rose to 4.2% in May 2026, its highest level since April 2023, up from 3.8% in April and in line with market expectations. This marked the third consecutive month of accelerating headline inflation, with energy costs jumping 23.5% (compared to 17.9% in April), driven by the energy shock triggered by the conflict with Iran. Gasoline prices soared 40.5%, following a 28.4% increase in April, while fuel oil prices climbed 58.9% (vs. 54.3%). Inflation also accelerated for shelter (3.4% vs. 3.3%) and food (3.1% vs. 2.3%).

On a monthly basis, the CPI increased 0.5%, slightly below April’s 0.6% rise and in line with forecasts. Energy prices rose 3.9%, accounting for more than 60% of the monthly increase.

Meanwhile, the annual core inflation rate edged up to 2.9%, its highest level since September 2025, compared to 2.8% in April and matching market expectations. However, on a monthly basis, core CPI rose just 0.2%, down from 0.4% in April and below forecasts of 0.3%.

Producer Price Index
U.S. producer prices rose 2.7% year-on-year in March 2025, easing from a 3.2% increase in February and coming in below market expectations of a 3.3% rise. This marked the smallest annual gain in producer prices since September. On a monthly basis, prices fell 0.4%, following an upwardly revised 0.1% increase in February and missing forecasts for a 0.2% gain, largely driven by a sharp drop in energy costs. Despite the pullback, producer prices are expected to trend higher in the coming months due to the impact of new tariffs.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.02%, bringing the current rate to 6.71%.
• 30-Year FRM rates saw no change from last week, leaving the current rate at 7.40%.

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.16%, with the current rate at 6.99%.
• 30-Year VA rates saw a decrease of -0.16%, with the current rate at 7.01%.

Jobless Claims
Initial Claims were reported to be 199,000 compared to the expected claims of 200,000. The previous week landed at 198,000.

What’s Ahead
A very light week for next week with the recent rush of inflation and job-related data. This will leave the Michigan Consumer Sentiment as the most impactful data release.