Mortgage Rates

The PCE Index inflation data has been released on schedule, and it paints a rather grim outlook for the future. Inflation has reached a three-year high, and given that it is the Federal Reserve’s preferred measure of inflation, it does not bode well for any impending rate cuts and may even raise the possibility of future rate increases.

This is somewhat offset by consumer spending having exceeded expectations, but this appears to be entirely related to high fuel prices, whether consumers want to spend that much or not.

PCE Index
The main inflation barometer preferred by the Federal Reserve rose to a three-year high in April and could rise even higher, posing a stiff challenge for households, businesses and the broader U.S. economy. The personal-consumption price index rose by 0.4% last month, the fifth large increase in a row.

Consumer Spending
Consumer spending rose in April at a seemingly robust rate, but only because of inflation. Americans aren’t getting much bang for their buck these days with gas prices so high. Personal spending increased 0.5% in April, the government said, but inflation also rose 0.4%. Household spending barely rose if inflation is taken into account.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.02%, bringing the current rate to 5.87%.
• 30-Year FRM rates saw an increase of 0.02%, bringing the current rate to 6.53%.

MND Rate Index

• 30-Year FHA rates saw a -0.08% decrease, with current rate at 6.10%.
• 30-Year VA rates saw a -0.08% decrease, with current rate at 6.12%.

Jobless Claims
Initial Claims were reported to be 215,000 compared to the expected claims of 213,000. The previous week landed at 210,000.

What’s Ahead
U.S. wage and employment reports are due next week, along with consumer credit data and several manufacturing-related releases. The following week will bring the latest CPI and PPI data releases.

With the prior week’s release of the inflation data and next week’s release of the PCE Index data — the Federal Reserve’s preferred inflation measure — it has been an exceptionally light week for economic releases. The only notable reports were Leading Economic Indicators and Consumer Sentiment, both of which showed declines. Consumer sentiment, in particular, has seen a significant drop since the change in administration, reaching lows not seen in decades.

U.S. Leading Economic Indicators
The Conference Board Leading Economic Index (LEI) for the US rose slightly by 0.1% in April 2026 to 97.4 (2016=100), following a 0.6% decline in March. Overall, the LEI fell by 0.7% over the six months between October 2025 and April 2026, a less severe rate of decline than its 1.0% contraction over the previous six months (April to October 2025).

Consumer Sentiment
The index of consumer sentiment dropped 4.1 points to 44.8 in May, touching the lowest level in the history of the survey going back to 1978, when it began to be published monthly.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.14%, bringing the current rate to 5.85%.
• 30-Year FRM rates saw an increase of 0.15%, bringing the current rate to 6.51%.

MND Rate Index

• 30-Year FHA rates saw a 0.01% increase, with current rate at 6.18%.
• 30-Year VA rates saw a 0.01% increase, with current rate at 6.20%.

Jobless Claims
Initial Claims were reported to be 209,000 compared to the expected claims of 212,000. The previous week landed at 211,000.

What’s Ahead
The following week should feature the release of the PCE Index inflation data, with an otherwise light week surrounding it.

The CPI and PPI came in on schedule, and the results were warmer than expected, with the Producer Price Index showing an increase of 0.6% — nearly double the expected 0.3% rise. This is also reflected in the elevated, though expected, CPI reading of 0.6%. This is certainly being driven by increased fuel and energy costs.

This is further supported by U.S. Retail Sales showing an increase, though high gas prices and inflation are playing a major role in the rise in sales figures. As a result, the rate cuts the Federal Reserve had discussed in the past are now looking very unlikely to happen.

Consumer Price Index
The U.S. inflation rate leaped to a nearly three-year high of 3.8% in April because of higher gas prices and the pain for consumers isn’t going away anytime soon. The spurt in inflation since the Iran war began 10 weeks ago could force the Federal Reserve to shelve an interest-rate cut this summer, especially since the job market has improved. The Fed cut a key interest rate three times last year to keep the unemployment rate from rising.

Producer Price Index
A recap of consumer prices in April showed inflation climbing to a three-year high. Now, the latest look at skyrocketing wholesale prices points to even higher inflation in the months ahead. The producer price index jumped 1.4% in April, the government said Wednesday, marking the biggest advance in more than four years.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.01%, bringing the current rate to 5.71%.
• 30-Year FRM rates saw a decrease of -0.01%, bringing the current rate to 6.36%.

MND Rate Index

• 30-Year FHA rates saw a 0.24% increase, with current rate at 6.17%.
• 30-Year VA rates saw a 0.24% increase, with current rate at 6.19%.

Jobless Claims
Initial Claims were reported to be 211,000 compared to the expected claims of 205,000. The previous week landed at 199,000.

What’s Ahead
A light week planned for next week, with only the Consumer Sentiment taking center stage.