A welcome and unexpected data release for both the PPI and CPI shows inflation expectations coming in lower than expected. The positive news was somewhat mitigated by the hawkish FOMC rate decision that also took place during the same week. Still, there is more optimism given that the data releases in the past 30 days have shown signs of inflation coming under control. At the very least, it suggests that the Federal Reserve’s policy to keep inflation under control has been effective. As a result, lending partners have quickly cut rates again after the meeting this week.

Consumer Price Index

The cost of consumer goods and services were unchanged in May for the first time in almost two years, suggesting the resurgence in inflation earlier in the year might be petering out. The flat reading in the Consumer Price Index last month was below the forecast for a 0.1% increase, based on a poll of economists by The Wall Street Journal.

Produce Price Index

U.S. wholesale prices fell in May for the second time in three months (thanks partly to lower gas prices), perhaps another sign that the upturn in inflation earlier this year is fading. The Producer Price Index dropped 0.2% last month, the government said Thursday. Economists polled by The Wall Street Journal had forecast an increase of 0.1%.

FOMC Rate Decision

Federal Reserve Chair Jerome Powell was tight-lipped at his press conference Wednesday, having been stung previously by too much optimism. The Federal Reserve remained hawkish throughout the conference and maintained current interest rates.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates are seeing a decrease by -0.12% with the current rate at 6.17%
• 30-Yr FRM rates are seeing a decrease by -0.04% with the current rate at 6.95%

MND Rate Index

• 30-Yr FHA rates are seeing a decrease by -0.20% for this week. Current rates at 6.44%
• 30-Yr VA rates are seeing a decrease by -0.20% for this week. Current rates at 6.45%

Jobless Claims

Initial Claims were reported to be 242,000 compared to the expected claims of 225,000. The prior week landed at 229,000.

What’s Ahead

The proceeding weeks for FOMC rate decisions and inflation data reports are typically light. Next week has a higher-than-expected amount of influential releases. The lineup includes Retail Sales and the official S&P Global US Manufacturing PMI numbers, giving us a clear indicator of the state of manufacturing for the U.S.