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The latest inflation data from the Consumer Price Index (CPI) showed prices picked up in March, rising 0.9% for the month and 3.3% year over year, up sharply from 2.4% previously. The increase was largely driven by higher fuel and gasoline prices tied to the Iran conflict.

Core inflation, which excludes food and energy, remained more moderate, rising 0.2% for the month and edging up to 2.6% annually.

We also received February’s Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, which had been delayed due to last fall’s government shutdown. The report showed broad-based price increases, a bit surprising given it reflects data from before the March oil spike.

What’s the bottom line? The Fed is balancing two competing trends: inflation that’s still above target and signs the labor market may be slowing. Sticky inflation supports a cautious approach to rate cuts, while softer employment data could strengthen the case for easing later this year.

The Fed has held its benchmark rate steady so far this year after cutting three times late last year. While that rate doesn’t directly set mortgage rates, it does influence overall borrowing costs.

March meeting minutes showed that more officials (though still a minority) are open to the possibility of rate hikes if inflation remains elevated, compared to the January meeting. This reflects ongoing concerns about geopolitical tensions and rising energy prices. Overall, the Fed remains in a wait-and-see mode, closely monitoring how inflation and the economy evolve.

Home prices remained stable from January to February, according to Cotality’s latest Home Price Insights report, with values up 0.5% compared to this time last year.

What’s the bottom line? The longer-term trend is encouraging. Looking ahead, Cotality projects home prices will climb about 4.7% over the next year, an uptick from their previous 4.4% forecast.

This reinforces a key point: real estate tends to build wealth over time. For example, a $500,000 home gaining 5% in value would add roughly $25,000 in a year, demonstrating how steady appreciation can make a meaningful impact.

The final reading for Q4 2025 shows the U.S. economy grew at an annualized rate of just 0.5%, a sharp slowdown from 4.4% in Q3 and slightly below the previous estimate of 0.7%. Much of the decline was tied to reduced government spending during the shutdown.

New unemployment claims increased by 16,000 to 219,000. However, this figure may understate the full impact, as some displaced workers are opting for gig or freelance work instead of filing for benefits, especially when unemployment support falls short of covering everyday expenses.

Meanwhile, continuing claims, which reflect the number of people still receiving benefits, dropped by 38,000 to 1.794 million. While that’s a modest improvement, the overall level remains elevated, suggesting many job seekers are still taking longer to secure new employment. Part of the decline may also be due to benefits expiring.

Housing data will be in focus, with March’s Existing Home Sales out on Monday and April homebuilder confidence on Wednesday. More inflation data is ahead, as Tuesday’s Producer Price Index will provide fresh insight into wholesale prices. Then on Thursday, the latest jobless claims will be released.

Mortgage Bonds ended last week testing a key support level at their 200-day Moving Average. If that level doesn’t hold, Bonds could move lower toward the next support zone around the 100.61 Fibonacci level and the 25-day Moving Average.

At the same time, the 10-year Treasury yield moved back above its 25-day Moving Average and ended the week just below an important ceiling near 4.332%.

Looking ahead, market movement will likely be driven by developments surrounding talks between the U.S., Iran, and Israel.