Q1 and Q2 Economic Trends

At the time of this writing the markets are digesting the June wholesale inflation report (Producer Price Index), which came in unchanged on a monthly basis and rose 2.3% year over year, below estimates. This news comes after a consumer price index report (CPI) showing inflation accelerated in June, rising at its fastest year-over-year pace since February and with signs of tariff-driven inflation starting to show up in the data.

This “mixed bag” of economic data further solidifies the position that the Federal Reserve will likely hold firm on rates this month. At this point, near term rate changes seem to be uncertain given the continued shifting of US Tariff policies. Assuming the administration’s pause on reciprocal tariffs is removed and the tariffs on drug imports take place, we may have a better understanding of market direction. Optimistically speaking, if we continue to see a softening in inflation data we may very well still see rate cuts before the end of the year.

Interest Rate Trends through Q2 2025

30-year mortgage rates through Q2 2025 remained relatively stable with a gradual downward trend. Rates started around 6.7% in early April and slowly declined to approximately 6.5% by the end of June, showing a modest 0.2 percentage point decrease.
The blue trendline indicates a downward movement throughout the quarter. While there were small day-to-day fluctuations, the overall direction favored borrowers. This gradual decline was positive news for potential homebuyers, as lower interest rates translate to more affordable monthly mortgage payments and increased purchasing power.