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At first glance, this morning’s inflation data looks like it should have rattled the bond market. The Producer Price Index, or PPI, which measures inflation at the wholesale level, came in much hotter than expected. Core PPI rose 0.7% versus a 0.2% forecast and a flat reading previously. If a similar surprise had shown up in the more well-known Consumer Price Index, or CPI, mortgage rates would likely be moving noticeably higher today.

So why hasn’t that happened?

The key reason is that PPI tends to be much more volatile than CPI. Big month-to-month swings are more common, which makes investors less likely to react aggressively to a single outlier reading. In other words, markets are more cautious about treating PPI surprises as a lasting signal.

More importantly for mortgage rates, the bond market focuses less on the headline PPI number and more on how certain PPI components feed into consumer inflation measures that matter most for bonds. When investors looked under the hood at those specific categories, they did not show the same level of inflation pressure suggested by the overall PPI data.

Because of that, bond prices have remained relatively steady. When bond prices hold up, yields, including mortgage rates, do not move sharply higher. For homebuyers, this means that despite eye-catching inflation headlines, the data did not deliver a clear reason for rates to worsen today.

This morning’s economic data showed fewer people continuing to file for unemployment benefits, the lowest level since October 2024. On the surface, that kind of news often points to a healthier job market, which can put pressure on bonds. When bonds are sold, their prices fall and yields, including mortgage rates, move higher.

What’s interesting, though, is the timing. Bonds did not start selling off right after the data was released. The more noticeable weakness showed up much later, suggesting that something beyond the jobs numbers may be influencing the market.

One possible factor is rising commodity prices, which have been moving higher at the same time bonds have been moving lower. That does not necessarily mean investors are selling bonds to buy commodities, but it does hint that broader inflation-related concerns could be back in focus. When inflation worries resurface, bond prices tend to struggle, and rates can drift higher.

Zooming out, the overall move has been fairly modest. Mortgage rate conditions are not changing dramatically today. Instead, this looks like another example of the bond market failing to move back into a lower, more favorable range. For homebuyers, that means rates are still facing resistance to improving, even if today’s economic data alone does not fully explain the move.

This Wednesday brings the first Federal Reserve announcement of 2026, but for homebuyers, it is shaping up to be a relatively low-drama event. This meeting does not include updated economic forecasts or the well-known “dot plot,” which usually gives markets clearer clues about where interest rates could be headed. Without those updates, these meetings tend to have less influence on mortgage rates.

That said, Fed meetings can still matter if the Chair’s comments shift expectations. The last time that happened in a meaningful way was late October, when remarks signaled that inflation and a still-strong job market could slow progress toward lower rates. Since then, the bond market has largely adjusted to that reality, accepting that solid employment and lingering inflation make it harder for rates to move steadily lower.

Right now, investors still believe there is a reasonable chance that borrowing conditions improve later this year, possibly by early summer. What markets will be listening for on Wednesday is any clarification about what needs to change in the economy before bond prices can rise in a more durable way.

Going into the meeting, bonds are slightly weaker, meaning prices are a bit lower and yields are a bit higher. This suggests that recent attempts for rates to move back into a lower, more comfortable range have stalled. For homebuyers, that means this week’s Fed meeting is unlikely to bring immediate relief for mortgage rates, but any hints about future economic progress could still shape the direction in the months ahead.

From a homebuyer’s perspective, the bond market can sometimes move for technical reasons rather than fresh economic news. This is one of those moments.

Recently, bond yields moved above an important ceiling around 4.20 percent on the 10-year Treasury. When that happens, it often leaves what traders call a “gap,” meaning prices moved quickly without much trading in between. Over time, markets tend to drift back and “fill” that gap as buying and selling balance out.

That is essentially what just happened. Yields moved back down close to that 4.20 level, suggesting the gap has been filled and the market has worked through that imbalance.

Why does this matter for mortgage rates? Once these gaps are filled, investors sometimes feel more comfortable stepping away from bonds again. When bonds are sold, their prices fall and yields, or rates, move higher. That does not guarantee rates will rise immediately, but it does reduce one source of recent support for lower rates.

For buyers, this means the recent pullback in rates may be losing momentum unless new economic data or events encourage investors to move money back into bonds. In the short term, rates could be more vulnerable to drifting higher if stronger economic news appears.

Mortgage rate markets are starting the day on relatively steady footing, even after a stronger-than-expected Durable Goods report this morning. Durable Goods track big-ticket purchases like appliances, vehicles, and machinery, and today’s reading came in well above forecasts. While that might sound like a big deal, this report is considered “stale” and typically does not carry much weight for interest rates.

Looking ahead, this week’s main event is Wednesday’s Federal Reserve announcement. Expectations are low for any major policy changes or surprises, which limits the potential for sharp rate movement. Instead, attention may shift to Friday’s Producer Price Index report, an inflation measure that occasionally influences mortgage rates but often plays a secondary role.

For now, the strong Durable Goods data caused only a very small uptick in bond yields, far too minor to meaningfully affect mortgage rates. In short, today’s economic news is not creating pressure for rates to rise, and the overall environment remains fairly calm for homebuyers keeping an eye on borrowing costs.

The Week Ahead

Here are the key economic reports and events scheduled over the next seven days that could influence mortgage rates, explained in simple terms.

Federal Reserve Policy Announcement (Wednesday)
This event often shapes market expectations, even when no major policy changes occur. Investors will listen closely to how the economy and inflation are described. If the tone suggests the economy is holding up well, investors may favor stocks over bonds, which can push bond prices lower and rates higher. If the message sounds more cautious, bond prices could rise and rates could ease.

Job Openings and Labor Turnover Survey (JOLTS) and ISM Manufacturing (Midweek)
These reports offer insight into job demand and manufacturing activity. Strong readings suggest businesses are hiring and producing at healthy levels, which can pull money out of bonds and into stocks. That usually means lower bond prices and higher rates. Weaker results can have the opposite effect, helping bond prices rise and rates move lower.

Producer Price Index (Friday)
This report measures inflation pressures at the wholesale level. Higher inflation signals that prices are rising before goods reach consumers, which can weigh on bonds and push rates higher. Softer inflation tends to support bond prices, helping rates drift lower or stay steady.

Consumer Sentiment and Business Surveys (Late Week)
These reports reflect how confident consumers and businesses feel about the economy. Strong confidence often points to continued spending and growth, which can reduce demand for bonds and lead to higher rates. If sentiment weakens, investors may lean toward bonds, increasing prices and easing rates.

Overall, the coming week includes several data points that could nudge mortgage rates in either direction. Strong economic signals tend to pressure rates higher, while weaker data often supports lower rates.

Bond markets, which heavily influence mortgage rates, saw a modest improvement overnight. Yields on the 10-year Treasury drifted slightly lower in the early hours, a move that typically helps keep mortgage rates from rising. There was no surge in trading activity or sharp price swings, just a slow and steady shift.

Once US markets officially opened, some selling pressure emerged and erased most of those early gains. The result is a mostly flat start to the day, with bond yields sitting close to yesterday’s levels.

The economic calendar includes reports on business activity (S&P PMIs), consumer sentiment, and leading economic indicators. While these provide useful insight into the health of the economy, they are not usually strong enough on their own to cause meaningful changes in mortgage rates.

With limited economic news scheduled, today’s market direction is more likely to be driven by investors adjusting their positions ahead of the weekend. Unless an unexpected geopolitical headline appears, mortgage rates are likely to stay fairly stable for now, giving homebuyers a relatively calm rate environment heading into the end of the week.