With the passing of the previous busy weeks of rate decisions, this week features the Federal Reserve’s preferred inflation report in the PCE Index, which has shown that inflation has come in hotter than expected for the month of May. This likely cements the Federal Reserve’s decision to take no action until later and further confirming most economists’ predictions. The consumer confidence has also taken a hit as it has further declined again for the month of May, indicating there is still significant apprehension within the markets and consumers alike. This is accompanied by Consumer Spending data, which met expectations, as many consumers had already begun pulling back on spending in response to tariff policies before many of those measures were paused.

PCE Index
In an updated forecast, Federal Reserve officials now expect inflation, as measured by the core personal-consumption expenditures (PCE) index, to jump to 3.1% by the end of the year, up from a rate of 2.5% in April.

Consumer Spending
Americans cut spending in May after buying lots of new cars and other goods earlier in the year to beat U.S. tariffs, underscoring how ongoing trade wars are disrupting the economy. Personal spending fell 0.1% last month, the government said Friday. It was the first decline since January.

Consumer Sentiment
The ongoing trade wars haven’t faded from public view. Consumer confidence fell in June, as Americans grew more pessimistic about the future of the economy and their ability to find a job. The index of consumer confidence declined to 93 last month from 98.4 in May, when the Trump administration dialed back the highest U.S. tariffs.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.07% for this week, with the current rates at 5.89%
• 30-Yr FRM rates saw a decrease of of -0.04% for this week, with the current rates at 6.77%

MND Rate Index
• 30-Yr FHA rates saw a decrease of -0.19% for this week, with the current rates at 6.22%
• 30-Yr VA rates saw a decrease of -0.19% for this week, with the current rates at 6.23%

Jobless Claims
Initial Claims were reported to be 236,000 compared to the expected claims of 246,000. The prior week landed at 246,000.

What’s Ahead
Non-farm Payrolls, Job Data, Manufacturing PMI Data will be the largest reports out for next week. The most important data reflecting the impact of tariffs has already been released.

With the passing of the FOMC rate decision, it has become clear that the Federal Reserve is taking a wait-and-see approach to the current situation regarding tariff policies. Although the vast majority of economists around the world have made predictions about what lies ahead, the effects have not yet been pronounced. Many of the recent tariff changes have also been revoked or put on pause for the largest industries, leaving many markets uncertain about the future. The key takeaway is that conditions will likely remain steady for now. The only other data release offering insight into what’s to come is the notable decline in U.S. retail sales, reflecting a reduction in consumer activity.

U.S. Retail Sales
Simmering trade wars have created a sort of start-and-stop economy, and the latest snapshot of retail sales in May underscores the threat to U.S. growth. Sales at retailers nationwide fell for the second month in a row, the government reported Tuesday. Receipts tumbled 0.9% in May after a small decline in April, based on seasonally adjusted numbers.

FOMC Rate Decision
The Federal Reserve on Wednesday stuck to its forecast of two interest-rate cuts in 2025 despite seeing a burst of inflation coming in the next few months as a result of higher tariffs. In an updated forecast, Fed officials now expect inflation, as measured by the core personal-consumption expenditures (PCE) index, to jump to 3.1% by the end of the year, up from a rate of 2.5% in April.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.01% for this week, with the current rates at 5.96%
• 30-Yr FRM rates saw a decrease of of -0.03% for this week, with the current rates at 6.81%

MND Rate Index
• 30-Yr FHA rates saw a decrease of -0.04% for this week, with the current rates at 6.41%
• 30-Yr VA rates saw a decrease of -0.05% for this week, with the current rates at 6.42%

Jobless Claims
Initial Claims were reported to be 245,000 compared to the expected claims of 246,000. The prior week landed at 250,000.

What’s Ahead
Job data is due ahead next week as well as the more recent data from the U.S. trade deficits, which many have had their eyes on.

The CPI and PPI have yet to reveal the impacts of the tariff policies that were placed temporarily, which gives some potential insight that there might be a path forward for the Federal Reserve to look at potential rate cuts. However, economists across many industries are expecting inflation to increase temporarily as an impact for the policies that were put in place.

Significant uncertainty remains across many import and export markets, with major players opting to err on the side of caution while awaiting a final decision from the administration regarding its policies. Consumer sentiment has shown a slight improvement for the first time in six months, offsetting the largely negative outlook that has dominated the market since the onset of the trade wars.

Consumer Price Index
Top Federal Reserve officials and Wall Street economists still think higher U.S. tariffs will cause prices to increase over the summer, however. The evidence was thin in May. The consumer-price index rose a mere 0.1% last month, the Bureau of Labor Statistics said Wednesday. That was a tick below Wall Street’s forecast. The 12-month increase in consumer prices edged up to 2.4% from a four-year low of 2.3%.

Producer Price Index
Americans have yet to feel any sting of inflation from the Trump tariffs when they go shopping. Now, a new look at wholesale prices suggests the coast might be clear for at least a little while longer. The producer-price index rose a scant 0.1% in May, the government said Thursday, coming in below the Wall Street forecast.

Consumer Sentiment
The University of Michigan’s closely watched gauge of U.S. consumer sentiment rose to 60.5 in a preliminary June reading from 52.2 in the prior month. This was the first improvement in six months. The gain was larger than forecast. Economists polled by the Wall Street Journal had expected sentiment to rise to 54 from the month-earlier reading of 52.2.

Primary Mortgage Market Survey Index
o 15-Yr FRM rates saw a decrease of -0.02% for this week, with the current rate at 5.97%
o 30-Yr FRM rates saw a decrease of -0.01% for this week, with the current rate at 6.84%

MND Rate Index
o 30-Yr FHA rates saw a decrease of -0.02% for this week. Current rates at 6.45%
o 30-Yr VA rates saw a decrease of -0.03% for this week. Current rates at 6.47%

Jobless Claims
Initial Claims were reported to be 248,000 compared to the expected claims of 246,000. The prior week landed at 248,000.

What’s Ahead
The next FOMC Rate Decision is up ahead next week. Nothing is expected from this rate decision, as the Federal Reserve has stated repeatedly they have no plans to change things until policies are settled. Leading indicators have also been a significant player in the latest releases with many things being very uncertain.

With next week bringing the latest wave of inflation data reports—namely the CPI and PPI—this week featured a slew of releases with minimal impact. The Trade Deficit and the Federal Reserve’s Beige Book stood out as the main indicators reflecting the current state of the economy. Although tariffs have largely been put on pause, their effects continue to reverberate across numerous industries.

Significant concern remains due to the instability in decision-making from the current administration. The Trade Deficit came in as expected, with the deficit cut in half following the announcement of tariffs, which caused imports to plunge. Meanwhile, the Beige Book indicated a significant slowing of the economy.

Federal Reserve Beige Book
The U.S. economy slowed to a crawl in May, with consumers pulling back on spending and businesses delaying hiring, according to the Federal Reserve‘s Beige Book survey released Wednesday. According to the report, nine of the 12 Fed districts reported contraction in economic activity or no change in growth. The remaining districts saw slight growth.

Trade Deficit
The numbers: The U.S. international trade deficit narrowed 55.5% in April to $61.6 billion, the Commerce Department said Thursday. Economists surveyed by the Wall Street Journal had predicted the deficit would narrow to a seasonally adjusted $63.3 billion from a record $140.9 billion in March.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.04% for this week, with the current rate at 5.99%
• 30-Yr FRM rates saw a decrease of -0.04% for this week, with the current rate at 6.85%

MND Rate Index
• 30-Yr FHA rates saw an increase of 0.02% for this week. Current rates at 6.47%
• 30-Yr VA rates saw an increase of 0.03% for this week. Current rates at 6.50%

Jobless Claims
Initial Claims were reported to be 247,000 compared to the expected claims of 236,000. The prior week landed at 239,000.

What’s Ahead
The Consumer Price Index (CPI) and Producer Price Index (PPI) inflation reports are the major releases scheduled for next week, with most expectations pointing toward a rise in inflation in the near future. These will be followed by the Consumer Sentiment report.

The PCE Index release—the Federal Reserve’s preferred inflation indicator—has shown favorable results. However, the overwhelming sentiment remains one of uncertainty due to the ongoing trade wars. With these conflicts still in full swing, inflation is expected to rise in the near future at a faster-than-anticipated pace. Following the recent trade truce with China, consumer sentiment has improved, though the long-term impact remains uncertain. As expected, consumer spending has declined noticeably, as the tariffs have led to short-term price increases.

PCE Index
The cost of living barely rose in April — and the rate of inflation slowed even closer to prepandemic levels — but it’s unclear whether the recent progress can be sustained as the trade wars drag on. The back-to-back monthly inflation readings were the softest since the pandemic in 2020. The 12-month rate of inflation, meanwhile, slowed to 2.1% from 2.3% and also matched the lowest level since the pandemic.

Consumer Sentiment
A survey of consumer sentiment improved in late May on some signs that the tariff war with China might not be as damaging for the economy as feared. The second of two readings of the consumer sentiment survey rose to 52.2 from 50.8 in early May, the University of Michigan said Friday. That matches the sentiment level in April.

Consumer Spending
Americans became more cautious spenders in April after the Trump administration jacked up U.S. tariffs and the stock market plunged. Now the big question is what they will do next as the trade wars die down. Personal spending rose a modest 0.2% last month, the government said Friday, matching the forecast of economists polled by The Wall Street Journal.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.02% for this week, with the current rate at 6.03%
• 30-Yr FRM rates saw an increase of 0.03% for this week, with the current rate at 6.89%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.08% for this week. Current rates at 6.45%
• 30-Yr VA rates saw a decrease of -0.07% for this week. Current rates at 6.47%

Jobless Claims

Initial Claims were reported to be 240,000 compared to the expected claims of 230,000. The prior week landed at 223,000.

What’s Ahead

A strong release week is upcoming with expected manufacturing reports from ISM, S&P Global Manufacturing to denote where producers stand. Following that is the Beige Book and Non-farm Payrolls. This will help indicate the direction of inflation and response to the tariff policies.

Despite the recent pause on tariffs for Europe and progressing talks with China, the economic outlook remains largely negative across all sectors and markets. Although this week was relatively light on economic reports, the most notable was the Leading Economic Indicators, which showed a significant decline in every measurable category for April. This decline is largely attributed to the tariff policies implemented recently. Overall, the outlook remains pessimistic, despite other markets showing a more favorable reaction to the recent pauses on tariffs.

U.S. Leading Economic Indicators

The Conference Board Leading Economic Index (LEI) for the US fell sharply by 1.0% in April 2025 to 99.4 (2016=100), after declining by 0.8% in March (revised downward from the -0.7% originally reported). The LEI declined by 2.0% in the six-month period ending April 2025, the same rate of decline as over the previous six months (April–October 2024).

“The U.S. LEI registered its largest monthly decline since March 2023, when many feared the US was headed into recession, which did not ultimately materialize,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Most components of the index deteriorated. Notably, consumers’ expectations have become continuously more pessimistic each month since January 2025, while the contribution of building permits and average working hours in manufacturing turned negative in April.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.09% for this week, with the current rate at 6.01%
• 30-Yr FRM rates saw an increase of 0.05% for this week, with the current rate at 6.86%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.18% for this week. Current rates at 6.53%
• 30-Yr VA rates saw an increase of 0.17% for this week. Current rates at 6.54%

Jobless Claims

Initial Claims were reported to be 227,000 compared to the expected claims of 230,000. The prior week landed at 229,000.

What’s Ahead

PCE Index data release, the Federal Reserve’s inflation indicator, the FOMC minutes giving us forward guidance for the Federal Reserve’s policy, and Univ. of Michigan Consumer Sentiment will be the most impactful releases of next week.