Inflation has shown signs of easing for the first time since the early days of the COVID pandemic. However, inflation remains higher than anticipated. Both the PPI and CPI data releases came in lower than expected, suggesting that inflationary pressures may be beginning to moderate. This is based on the newer, more theoretical reporting for the PPI and CPI.

It is unlikely this will cause any significant change in stance by the Federal Reserve, as it still prefers the PCE Index as its preferred inflation indicator. In addition, prices remain elevated for the average consumer, creating pressure across many sectors. With the Fed’s rate decision next week, we are unlikely to see any changes.

Producer Price Index
Wholesale prices fell in June for the first time in 10 months, largely due to lower gas prices, but it is unclear whether the recent slowdown in inflation will persist in light of renewed hostilities between the U.S. and Iran. The producer-price index dropped 0.3% in June, the government said Wednesday, following a similar decline in the prices consumers paid.

Consumer Price Index
The cost of living fell in June for the first time in six years thanks to plunging gas prices, but the U.S.’s battle against high inflation is far from over. The consumer-price index sank 0.4% last month to mark the first drop since May 2020, when the coronavirus pandemic was in its early months and raging globally. The CPI decline was twice as large as Wall Street had forecast.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.11%, bringing the current rate to 5.93%.
• 30-Year FRM rates saw an increase of 0.06%, bringing the current rate to 6.55%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.04%, with current rate at 6.25%.
• 30-Year VA rates saw an increase of 0.03%, with current rate at 6.26%.

Jobless Claims
Initial Claims were reported to be 208,000 compared to the expected claims of 218,000. The previous week landed at 218,000.

What’s Ahead
The FOMC rate decision, the PCE Index, GDP data, and the Consumer Sentiment report.

The Trade Balance has offered little new insight, as it has largely returned to levels seen prior to the earlier period of unstable tariff policies. Consumer Credit had been trending upward nearly every month; however, this latest report breaks that pattern by showing a decline in consumer credit usage. Meanwhile, the Fed’s Minutes revealed nothing particularly substantial, instead reflecting a dovish stance and a willingness to maintain current interest rates for the foreseeable future.

Consumer Credit
Total US consumer credit fell by $0.18 billion in May 2026, following an upwardly revised $20.82 billion increase in April and missing market expectations for a $17.1 billion gain. Revolving credit, which includes credit card debt, declined to $1.34 trillion from $1.35 trillion, pointing to weaker short-term consumer borrowing. Meanwhile, non-revolving credit, which includes auto and student loans, increased to $3.81 trillion from $3.80 trillion. Overall consumer credit was unchanged on an annualized, seasonally adjusted basis, as revolving credit contracted at a 4.7% annual rate while non-revolving credit grew at a 1.6% pace.

U.S. Trade Balance
The US trade deficit widened sharply to $77.6 billion in May 2026 from a revised $54.6 billion in April, broadly in line with market expectations of a $78.5 billion shortfall. The gap was the largest since March 2025, as imports climbed 3.3% to $395.3 billion, their highest level in more than a year. The increase was driven primarily by higher purchases of consumer goods, particularly pharmaceutical preparations and cell phones, as well as crude oil and passenger cars. 

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.03%, bringing the current rate to 5.82%.
• 30-Year FRM rates saw an increase of 0.06%, bringing the current rate to 6.49%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.04%, with current rate at 6.21%.
• 30-Year VA rates saw an increase of 0.04%, with current rate at 6.23%.

Jobless Claims
Initial Claims were reported to be 215,000 compared to the expected claims of 218,000. The previous landed at 217,000.

What’s Ahead
Next week brings the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) inflation reports. Although inflation remains an important indicator, these reports are not expected to significantly alter the Federal Reserve’s current stance on interest rates.