Over the weekend, the recent talks with China and the U.S. about the recent tariffs have been said to be making progress recently in Geneva, leading to restoring some stability across all sectors and markets. The prior week, the FOMC decided not to change the rates and that will likely be the case in the foreseeable future. While having less presence due to the current economic climate, this week’s CPI and PPI inflation data releases remain as important as ever. These reports will offer insight into the recent impact of the trade war and help inform expectations for the near-term economic outlook.
Trade Deficit
The U.S. international trade deficit, including goods and services, widened 14% in March to a record seasonally adjusted $140.5 billion, the Commerce Department said Tuesday, as companies rushed to import foreign products while they were slightly cheaper than they would be with White House tariffs added to the cost. Economists surveyed by The Wall Street Journal had predicted the deficit would widen to $136 billion from $122.7 billion in February.
FOMC Rate Decision
At its May 7, 2025, meeting, the Federal Open Market Committee (FOMC) unanimously decided to keep the federal funds rate unchanged at 4.25% to 4.5%, maintaining the rate at this level since December 2024. The Fed attributed this decision to increasing concerns about rising unemployment and inflation risks.
Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.03% for this week, with the current rate at 5.89%
• 30-Yr FRM rates saw no change for this week, with the current rate at 6.76%
MND Rate Index
• 30-Yr FHA rates saw a decrease of -0.03% for this week. Current rates at 6.25%
• 30-Yr VA rates saw a decrease of -0.05% for this week. Current rates at 6.25%
Jobless Claims
Initial Claims were reported to be 228,000 compared to the expected claims of 230,000. The prior week landed at 241,000.
What’s Ahead
Consumer Price Index and the Producer Price Index are set to release next week, highlighting the biggest indicators of the impact of the recent tradewar on the average consumer.