Mortgage Rates Today, June 25, 2026: Crucial Inflation Report Due This Morning

The bigger picture

Mortgage rates fell moderately yesterday. But whether that happy trend continues may depend on this morning's economic reports.

The most important of those is the personal consumption expenditures (PCE) price index for May. This is the Federal Reserve's favorite gauge of inflation because it's the most accurate. The consumer price index may be more famous, but the PCE price index is the one economists care about.

Also this morning, we're expecting the final reading of gross domestic product (GDP) in the first quarter of this year. Again, this could move mortgage rates if it surprises markets.

Scroll on down for details of today's economic reports and how they might affect mortgage rates.

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What's coming up?

Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning the war, employment, inflation, tariffs, and deficit funding are especially influential at the moment.

The Fed

April's price indices (the CPI, PPI, IPI and PCE) tend to lend weight to pessimistic arguments about future inflation rates.

May's consumer price index and producer price index, published on Jun. 10 and 11, respectively, were even worse than April's. Meanwhile, May's import price index, released Jun. 16, came in worse than markets were expecting. May's PCE price index is due today.

Those reports landed well after the last meeting of the Federal Reserve's rate-setting committee. Minutes of that meeting were published on May 20 and included the following:

"Almost all participants noted that there was a risk that the conflict in the Middle East could persist for an extended period or that, even after the conflict ended, the prices of oil and other commodities could remain elevated for longer than expected. In such scenarios, these participants expected continued upward pressure on inflation arising from supply chain disruptions, high energy prices, or the pass-through of higher input costs to other prices. The vast majority of participants noted an increased risk that inflation would take longer to return to the Committee’s 2 percent objective than they had previously expected."

Bottom line: "A majority of participants highlighted ... that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent." Policy firming is Fedspeak for a rate hike.

We should get the minutes of the Jun. 17 meeting roughly three weeks from that date. But events surrounding that showed committee members all but ruling out a further cut to general interest rates this year. And almost half of them now expect a hike in 2026.

Bond markets vs. stock markets

Mortgage rates are largely dictated by yields on a type of bond, the mortgage-backed security (MBS). So, we focus on bond markets.

On May 7, The New York Times explored why stock markets and bond markets have been behaving so differently from each other since the start of the conflict in the Middle East.

Investors in stocks have been wagering that U.S. companies will continue to generate large profits during the conflict. And the stock market typically cares only about whether dividends and company values will continue to rise.

"But the bond market is another matter," said The Times. "Bond traders have maintained a much sharper focus on risk. Yields remain correlated with shifts in the price of oil. As oil prices have spiked and inflation has risen, yields have risen and bond prices, which move in the opposite direction, have fallen."

Comerica Bank's weekly preview

On Monday, Comerica Bank published its weekly preview:

"The Fed’s preferred measure of inflation is forecast to rise to the highest in three years in the May release, reflecting the same spike in energy prices that pushed up the CPI and PPI during the month. Energy prices fell in the first half of June, which should lower PCE inflation considerably in the next report.

"Real GDP growth in the first quarter of 2026 is forecast to be revised down slightly in the Bureau of Economic Analysis’s third estimate, incorporating recent data that pointed to softer consumer spending on services and business fixed investment in equipment."

Comerica also said it expected consumer sentiment to improve this month, reflecting a more cheerful mood as gas prices have fallen back this month.

Comerica's predictions often differ from market expectations, which are based on a consensus of a wider pool of analysts' forecasts.

Mortgage rates today

There are four economic reports on today's MarketWatch economic calendar. But we doubt that either May's durable goods orders or the latest weekly jobless claims will affect mortgage rates much.

However, the PCE price index may well move those rates. Markets are especially sensitive to inflation data at the moment.

Price indices have four headline figures. Two of those are for the reporting month (May), and the other two are year-over-year (YOY) numbers, which this time track price changes between June 1, 2025, and May 31, 2026.

Two for each period measure changes in all the prices included in the survey. And the other two are "core" figures, which monitor all prices excluding those for energy and food.

Here are market expectations for the PCE price index:

• May PCE price index — Markets expect all prices to have risen by 0.5% in May, slightly faster than April's 0.4%
• May core PCE price index — Markets expect core prices to have risen by 0.3% in May, slightly faster than April's 0.2%
• YOY PCE price index — Markets expect all prices to have risen by 4.1% year over year, faster than April's 3.8%
• YOY core PCE price index — Markets expect core prices to have risen by 3.4% year over year, slightly faster than April's 3.3%

Lower-than-expected inflation figures tend to exert downward pressure on mortgage rates, while higher-than-expected numbers tend to push them upward.

This morning's other key report is the third and final reading of GDP in the first quarter of this year. Markets expect it to come in at 1.7%, slightly better than the second reading's 1.6%.

What's next?