While many were optimistic about an additional rate cut, the Federal Reserve has decided to maintain current interest rates pending further data. They have previously stated that at least one more rate cut would follow the last one, but their stance now appears to depend on the availability of sufficient supporting data.

Recent Core PPI reports have also been released, and the data conflicted with earlier CPI and non-core PPI reports. The reports showed that inflation for producers along major production pathways has increased more than expected. This is likely to result in a noticeable increase in wholesale prices across the board.

Additionally, despite the policy intentions behind the tariffs, the trade deficit has remained firmly elevated amid recent policy changes. It is unlikely that even more significant tariff adjustments will lead to a narrowing of the trade deficit. Consumer confidence has also declined for another consecutive week, despite the economy continuing to show signs of strength.

Core PPI
The cost of wholesale goods and services rose sharply at the end of last year, underscoring that the battle against inflation is far from over as President Donald Trump names his pick for chair of the Federal Reserve. Producer prices jumped 0.5% in December, an index published by the government showed. The report was delayed by the government shutdown last fall.

Trade Deficit
The trade deficit fell a few months ago to a 16-year low, but it was fool’s gold. The U.S. is still running a trade gap near historically high levels. In November, the deficit almost doubled to $56.8 billion from just $29.2 billion in October.

Consumer Confidence
The stock market keeps hitting record highs, unemployment is low and the economy is growing surprisingly fast, but Americans were in a foul mood as the new year got under way. A long-running survey of consumer confidence fell in January to a 12-year low, dipping below even the worst readings during the pandemic.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.05%, with the current rate at 5.49%
• 30-Year FRM rates saw an increase of 0.01%, with the current rate at 6.10%

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.06%, with current rates at 5.79%
• 30-Year VA rates saw a decrease of -0.06%, with current rates at 5.81%

Jobless Claims
Initial Claims were reported to be 209,000 compared to the expected claims of 205,000. The prior week landed at 210,000.

What’s Ahead
Unemployment Data, Consumer Credit, and U.S. Hourly Wages are set to release next week, with an additional Consumer Sentiment report by the Univ. of Michigan.

The Federal Reserve’s preferred inflation indicator — the Personal Consumption Expenditures (PCE) Index — released under delayed conditions, but it was within expectations. Next week will be another Federal Reserve Rate Decision, and it is expected that the Federal Reserve will reduce rates at least one more time. The optimism among the broader market has been showing that multiple sectors that seem unphased by the administrative decisions and current political climate. 

PCE Index
The PCE Index came in at 2.8% in November on an annualized basis. According to data from the Commerce Department, core PCE, which excludes food and energy, also stood at 2.8% on an annual basis. It rose 0.2% over the previous month.

GDP
The economy expanded at a zippy 4.4% annual pace in the third quarter of 2025, an updated estimate showed, to keep the U.S. on track to score the fifth straight year of above-average growth. Gross domestic product, the official scorecard of the economy, was revised up from the original 4.3% reading, the government said Thursday. It was the strongest quarter of growth in two years.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.06%, with the current rate at 5.44%
• 30-Year FRM rates saw an increase of 0.03%, with the current rate at 6.09%

MND Rate Index

• 30-Year FHA rates saw an increase of 0.10%, with current rates at 5.85%
• 30-Year VA rates saw an increase of 0.10%, with current rates at 5.87%

Jobless Claims
Initial Claims were reported to be 200,000 compared to the expected claims of 208,000. The prior week landed at 199,000.

What’s Ahead
The FOMC Rate Decision and delayed Core PPI data will be the largest items for the upcoming week.

Inflation reports have shown their cards, and they have come in line with expectations. These newer reports rely on less data from sources overall, which is why the PCE Index remains the Federal Reserve’s preferred inflation indicator—and that distinction is even more relevant now.

Despite inflation coming in as expected, consumers are still feeling the steady pressure of price increases that are not keeping pace with wage growth. This is also consistent with what the PPI has shown, indicating that manufacturers are experiencing persistent inflationary pressure as well, though still in line with expectations. The Federal Reserve is still expected to reduce rates one more time heading into the new year.

Consumer Price Index
Inflation remained steady, with the December 2025 year-over-year CPI at 2.7%, matching November, while core CPI (excluding food/energy) was slightly lower at 2.6%, suggesting easing underlying pressures but with persistent shelter costs as the main driver. Month-over-month, CPI rose 0.3%, driven by food and shelter, though energy saw smaller gains and used cars declined, indicating a mixed but generally stable trend.

Producer Price Index
The cost of wholesale goods and services rose during the government shutdown and showed the persistence of inflation pressures in the guts of the U.S. economy. A combined report on producer prices showed a 0.2% increase in November and a 0.1% rise in October, the government said. The two months were combined into one report due to the recent federal shutdown.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.08%, with the current rate at 5.38%
• 30-Year FRM rates saw a decrease of -0.10%, with the current rate at 6.06%

MND Rate Index

• 30-Year FHA rates saw an increase of 0.06%, with current rates at 5.75%
• 30-Year VA rates saw an increase of 0.07%, with current rates at 5.77%

Jobless Claims
Initial Claims were reported to be 198,000 compared to the expected claims of 215,000. The prior week landed at 207,000.

What’s Ahead
Another FOMC Rate Decision for next week as well as some of the delayed Core PPI inflationary data.

The trade deficit dropped significantly this month, resulting in the smallest gap in the last 16 years. This has been entirely driven by the ongoing gold rush and, to a much less impactful degree, businesses working their way around high tariffs. The unemployment reports, however, have shed another light, showing a steady trend of unemployment rising and reaching a four-year high as of last week.

This is somewhat offset by consumer sentiment, which showed a slightly positive increase alongside relative improvements in the economy. All in all, the data points to mixed results for the broader market. The upcoming week will be a much greater indicator, with all major inflation reports in the PPI and CPI scheduled for release.

Trade Deficit

The U.S. trade deficit plummeted 39% in October to reach the lowest level in 16 years, but the steep drop stemmed from an ongoing gold rush of sorts as well as efforts by businesses to work around high tariffs. The trade gap shrank to $29.4 billion in October from $48.1 billion in September, the government said Thursday. The October report was delayed by the federal shutdown.

Consumer Sentiment

The University of Michigan’s gauge of consumer sentiment rose to 54 in a preliminary January reading from 52.9 in the prior month. This marked the second straight gain and the highest level of sentiment since September. “Consumers perceived some modest improvement in the economy,” the survey found, although sentiment remains nearly 25% below last January’s reading.

Jobs Report

The unemployment rate climbed to a four-year high of 4.6%, according to a mostly tepid November jobs report. The economy lost 105,000 jobs in October and added 64,000 new jobs in November, the government said, with the report skewed by deferred resignations of federal workers.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.02%, with the current rate at 5.46%
• 30-Year FRM rates saw an increase of 0.01%, with the current rate at 6.16%

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.16%, with current rates at 5.69%
• 30-Year VA rates saw a decrease of -0.17%, with current rates at 5.70%

Jobless Claims

Initial claims were reported at 208,000 compared to expected claims of 210,000. The prior week’s total was 200,000.

What’s Ahead

CPI and PPI inflation reports are the major releases for next week, along with the usual employment data.

With the only notable item on the schedule being the release of the Federal Reserve minutes, which reflect the current stance of the Fed, virtually nothing has changed since the last rate cut. The Federal Reserve is expected to continue its wait-and-see approach.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.06% with the current rate at 5.44%
• 30-Yr FRM rates saw a decrease of -0.03% with the current rate at 6.15%

MND Rate Index

• 30-Yr FHA rates saw no change for this week. Current rates at 5.85%
• 30-Yr VA rates saw no change for this week. Current rates at 5.87%

Jobless Claims

No release of data due to the holidays.

What’s Ahead

The upcoming week will feature the usual data releases, with the major ones being the Trade Deficit, Consumer Credit, and Consumer Sentiment from the University of Michigan.