Both the CPI and PPI came in precisely within expectations. Under the current circumstances, there is now a very high probability that the Federal Reserve will implement a quarter-point rate cut, a view widely shared by industry analysts. There is also a strong possibility of another cut to follow.

Meanwhile, Consumer Sentiment has hit another low in the last 4 months, as many have growing concerns about the state of the job market in addition to inflation continuing to grow. It is unknown how much the rate cuts will impact inflation, but so far the Federal Reserve has managed to maintain a delicate balance.

Consumer Price Index
The cost of living rose again in August at an accelerated pace, but probably not enough to discourage the Federal Reserve from reducing interest rates next week. The latest consumer price index (the main measure of U.S. inflation) could raise questions about how aggressively the Fed cuts rates, however, in the upcoming months. The consumer price index rose 0.4% last month, the government said Thursday. That was one tick above the Wall Street forecast.

Producer Price Index
The producer price index (PPI) dipped 0.1 percent on a month-on-month basis, according to Department of Labor data — when analysts had expected a 0.3-percent increase.

Consumer Sentiment
The University of Michigan’s gauge of consumer sentiment fell to a reading of 55.4 in September, a four-month low. The worsening of sentiment was particularly strong among lower and middle-income respondents.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.10% for this week, with the current rate at 5.50%
• 30-Yr FRM rates saw a decrease of -0.15%, with the current rate at 6.35%

MND Rate Index
• 30-Yr FHA rates saw an increase of 0.05% for this week. Current rates at 6.00%
• 30-Yr VA rates saw an increase of 0.04% for this week. Current rates at 6.01%

Jobless Claims
Initial Claims were reported to be 263,000 compared to the expected claims of 236,000. The prior week landed at 237,000.

What’s Ahead
The FOMC Rate Decision will be ahead next week, as well as the usual employment data.

The release of major inflation data has once again arrived with the Consumer Price Index and the Producer Price Index, offering insight into the current state of the economy. Based on recent statements from the Federal Reserve, there is considerable speculation that rate cuts may occur regardless of the trajectory of inflation.

More recent data releases have shown that the economy is still on shaky ground after changes to tariff policies, leading things to be more unstable than anticipated. Trade deficits have also shown to have bounced back significantly from the prior months, while the manufacturing side are still showing impacts from the tariffs. Jobless Claims have also hit the highest levels since June, giving some concern to the broader labor market.

Trade Deficit
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $78.3 billion in July, up $19.2 billion from $59.1 billion in June, revised.

Manufacturing PMI
The trade wars are slowly dying down. The damage to American manufacturers is not. Industrial production fell in August for the sixth month in a row, according to an index compiled by the Institute for Supply Management. The ISM surveys executives every month about how their businesses are doing.

Job Reports
The number of people who applied for unemployment benefits in the seven days ended Aug. 30 rose by 8,000 to 237,000, the Labor Department said Thursday. It is the highest level since late June. Economists polled by The Wall Street Journal had estimated new claims would rise by 2,000 to 231,000.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.09% for this week, with the current rate at 5.60%
• 30-Yr FRM rates saw a decrease of -0.06%, with the current rate at 6.50%

MND Rate Index
• 30-Yr FHA rates saw a decrease of -0.11% for this week. Current rates at 5.95%
• 30-Yr VA rates saw a decrease of -0.11% for this week. Current rates at 5.97%

Jobless Claims
Initial Claims were reported to be 237,000 compared to the expected claims of 230,000. The prior week landed at 229,000.

What’s Ahead
Upcoming reports include the CPI and PPI inflation data, along with the University of Michigan Consumer Sentiment Report, which will close out the week.

With the release of the PCE Index, inflation has shown to still be creeping upwards but there is significant speculation that the Federal Reserve will continue with their interest rate cut in the future. Meanwhile, the Consumer Sentiment report has been growing pessimistic amidst the job market, which has been shown to be in a pattern of cooling down.

This is offset by the strong growth by the GDP estimates for the second quarter, as it was initially predicted the tariff changes would have a significant impact on the GDP estimates, but the impact has been less prominent than expected.

PCE Index
A key measure of inflation rose in July at a rate that suggests persistent price pressures tied to higher U.S. tariffs, but the increase probably wasn’t big enough to dissuade the Federal Reserve from cutting interest rates next month. The PCE index, the Fed’s preferred inflation gauge, rose 0.2% in July, the Bureau of Economic Analysis said Friday.

Consumer Sentiment
Consumers’ views of the labor market cooled further in August, the Conference Board said Tuesday. Roughly 20% of consumers said jobs were “hard to get” in August, up from 18.9% in the prior month.

GDP Estimates Q2
The US economy grew at an annual rate of 3.3% in Q2 2025, a sharp rebound from the 0.5% contraction in Q1, according to second estimates. The figure was revised slightly higher from the first estimate of 3%, mainly due to upward revisions to investment (5.7% vs 1.9% in the first estimate) and consumer spending (1.6% vs 1.4% in the first estimate) that were partly offset by a downward revision to government spending (-0.2% vs 0.4% in the first estimate) and an upward revision to imports (-29.8% vs -30.3% in the first estimate). 

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw no change for this week, with the current rate at 5.69%
• 30-Yr FRM rates saw a decrease of -0.02%, with the current rate at 6.56%

MND Rate Index
• 30-Yr FHA rates saw a decrease of -0.05% for this week. Current rates at 6.06%
• 30-Yr VA rates saw a decrease of -0.05% for this week. Current rates at 6.08%

Jobless Claims
Initial Claims were reported to be 229,000 compared to the expected claims of 230,000. The prior week landed at 234,000.

What’s Ahead
Trade Balance will be the most notable release next week indicating the impact of tariffs, followed up by the Nonfarm Payrolls and employment data. Manufacturing PMI and Beige book will offer a backdrop of information.

The FOMC meeting that was held the previous week to discuss upcoming decisions addressed the future of the economic landscape.

During his remarks, Jerome Powell stated that inflation will rise in the future, with consumers bearing the burden. Many have speculated that this means reductions in current rates are unlikely to happen anytime soon, in an attempt to keep inflation under control.

Another notable release was the leading economic indicators, which once again showed contraction—signaling the potential for further economic decline.

Leading Economic Indicators
The Leading Economic Indicator (LEI) for the US inched down by 0.1% in July 2025 to 98.7 (2016=100), after declining by 0.3% in June. The LEI fell by 2.7% over the six months between January and July 2025, a faster rate of decline than its –1.0% contraction over the previous six-month period (July 2024 to January 2025).

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.02% with the current rate at 5.69%
• 30-Yr FRM rates saw no change from last week, with the current rate at 6.58%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.07% this week. Current rates at 6.11%
• 30-Yr VA rates saw a decrease of -0.06% this week. Current rates at 6.13%

Jobless Claims
Initial Claims were reported to be 235,000 compared to the expected claims of 225,000. The prior week landed at 224,000.

What’s Ahead
PCI Index inflation data, the Federal Reserve’s preferred inflation indicator, is set for next week. Other notable releases will be the GDP Estimates for the second half of the year, Personal Income & Spending, Consumer Sentiment, and Retail Inventories.

This marks the first release of CPI and PPI data since the recent reduction in data collection that is used to determine the current inflation. The Producer Price Index has shown quite clearly that there has been the biggest whole price jump in the last 3 years, showing that the administration’s policies on tariffs are having an impact. The CPI has shown a similar increase in inflation, but still within expectations in lieu of the current tariff policies. 

There is still data to be collected, with some speculation that the Federal Reserve may implement rate cuts in the future. Consumer sentiment has also shown increased concern regarding inflation and unemployment statistics, as trends have worsened following the tariff changes, leading to a three-month low in consumer sentiment.

Consumer Price Index
A key measure of consumer prices posted the biggest increase in July in six months, suggesting inflation is showing upward pressure from tariffs but maybe not enough to deter the Federal Reserve from cutting interest rates soon. The so-called core rate of the consumer price index rose 0.3% in July to mark the biggest increase since the first month of the year. The core rate omits food and energy and is a better predictor of future inflation.

Producer Price Index
The cost of wholesale goods and services—where rising inflation tends to show up first—posted the biggest increase in July in three years, possibly heralding a sizable acceleration in price hikes tied to U.S. tariffs. The producer-price index jumped 0.9% last month after no change in June, the government said Thursday. The surge was a big surprise to Wall Street.

Consumer Sentiment
Fresh worries about inflation soured Americans on the economy in early August, underscoring lingering anxiety about the highest U.S. tariffs in decades and a further rise in unemployment. The first reading of the consumer-sentiment survey in August dropped to a three-month low of 57.2 from 61.8 in July, the University of Michigan said Friday.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.04% with the current rate at 5.71%
• 30-Yr FRM rates saw a decrease of -0.05% with the current rate at 6.58%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.03% this week. Current rates at 6.18%
• 30-Yr VA rates saw an increase of 0.03% this week. Current rates at 6.19%

Jobless Claims
Initial Claims were reported to be 224,000 compared to the expected claims of 229,000. The prior week landed at 226,000.

What’s Ahead
FOMC Minutes will give an indication where the Federal Reserve decides to still hold their “wait-and-see” approach. This will be followed by the PMI Manufacturing and Services data, relevant to the tariff changes.

The major report to look out for was the Trade Balance, which has decreased more than expected, suggesting that the current administration’s policies are having an impact. However, the long-term impact on the economy as a whole remain to be seen. This was followed closely by consumer credit, which came in far lower than expected, though many are predicting that consumer credit usage will grow over time. While the labor market remains constrained, the consumer market has remained stable in spite of the uncertainty brought on by the tariff policies.

Trade Balance
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $60.2 billion in June, down $11.5 billion from $71.7 billion in May, revised.

Consumer Credit
Revolving credit, mainly credit cards, declined for the second straight month in June, the Federal Reserve said. Revolving credit fell at a 1% rate in June after a 3.5% drop in the prior month. Declines in credit-card borrowing are rare: The last time revolving credit fell for two straight months was during the COVID pandemic in 2020.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.10% with the current rate at 5.75%
• 30-Yr FRM rates saw a decrease of -0.09% with the current rate at 6.63%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.07% this week. Current rates at 6.15%
• 30-Yr VA rates saw a decrease of -0.08% this week. Current rates at 6.16%

Jobless Claims
Initial Claims were reported to be 226,000 compared to the expected claims of 221,000. The prior week landed at 219,000.

What’s Ahead
A heavy week with the next round of inflation data being released with both the CPI and PPI reports. It should be noted that this CPI will feature less recorded data, relying more on estimations. In addition, Retail Sales, Consumer Sentiment, and Treasury Budget should prove to be impactful data releases.