22 July 2025

Big News Week: Inflation Numbers and Surprise Headlines

Weekly Mortgage Rate Comparison 

Consumer Price Index (CPI)

On Tuesday, the government shared the Consumer Price Index (CPI) – a report that tells us how much prices went up in June. People were especially curious to see if tariffs (extra taxes on imported goods) were making things more expensive.

Here’s the quick version:

• Prices went up more than last month…

• …but not as much as experts thought they would.

At first, that was good news. It meant inflation wasn’t getting worse, so mortgage rates (the interest people pay when borrowing money to buy a house) dropped a little. But that didn’t last.

When traders looked closer at the report, they noticed prices in some areas were rising because of tariffs. Even though the total number didn’t show it, this made investors think the Federal Reserve (the Fed) might not lower interest rates anytime soon.

So, bond prices dropped and mortgage rates went back up a bit.

What Happened Wednesday?

Wednesday started out quiet. Then a big headline hit: a report said that President Trump had talked about firing the head of the Federal Reserve, Jerome Powell.

Even though Trump later said he wasn’t really planning to do it, the news still caused a big reaction in the markets.

Why did this matter?

• The Fed helps set short-term interest rates.

• Mortgage rates come from long-term bonds, not directly from the Fed.

• If people think the Fed will make bad decisions (like cutting rates for the wrong reasons), they might stop buying bonds.

• Less demand for bonds means higher mortgage rates.

So, even just talking about removing Powell made investors nervous. Mortgage rates jumped—though not by a huge amount—because many lenders hadn’t had time to react before the news changed again.

The Rest of the Week

Thursday’s retail sales report (which shows how much people are spending in stores) had mixed results. Sales were up, but once you account for inflation, it looked like people were spending less on fun or extra stuff. That was slightly good news for mortgage rates, but it didn’t change much overall.

What’s Next?

Things might stay quiet for a few weeks—unless another surprise headline hits. The next big news comes in early August, when we’ll see the jobs report. If unemployment starts going up, the Fed might feel more pressure to lower rates. But if jobs stay strong, rates probably won’t drop much.

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