Markets Today: New Highs, Steady Inflation, and Mortgage Rates That Won’t Budge

The markets are feeling good right now, but there’s still one very expensive elephant in the room: mortgages. Here’s where things stand.

Inflation: Stable and (for now) predictable

CPI (July 2025) is 322.132, with Core CPI at 328.656. Annual inflation is holding at 2.7%.
Inflation expectations are calm:

• 1 year: 2.59%
• 5 years: 2.13%
• 10 years: 2.11%
• 30 years: 2.30%

What this means for you:
The inflation outlook is steady, which is why talk of Fed rate cuts is picking up. But the Fed won’t act without a clear, sustained cooling trend — so don’t bank on lower borrowing costs overnight.

Rates & Yields: Still elevated

• Federal Funds Rate: 4.33%
• Treasury yields: 1 year at 3.93%, 5 years at 3.83%, 10 years at 4.27%
• 30-year fixed mortgage: 6.63% (likely staying between 6.5%–7% through year-end)

What this means for you:
Home financing remains pricey, and unless you’re willing to gamble on timing the market, those rates aren’t likely to give you much relief this year. Savers, on the other hand, can keep earning solid returns on short-term Treasuries and CDs.

Stocks: Another record close

The S&P 500 ended the day at 642.69 (+1.06%), fueled by bets that the Fed could cut rates sooner rather than later.

What this means for you:
If you’re in broad index funds, you probably saw a nice bump today. Just remember: markets love rate-cut rumors… until they don’t.

Key developments to watch

• Fed policy decisions: Any hint of a shift toward rate cuts will move markets fast.
• Mortgage affordability: Even with inflation stable, high mortgage rates will keep housing demand in check.
• Long-term yields: The 10-year Treasury at 4.27% remains a key driver for mortgage rates and retirement portfolio planning.

The bottom line

Stocks are hitting new highs, inflation is steady, and the Fed’s next move could be pivotal. But for now, mortgage rates remain stubbornly high — keeping the housing market in a slow grind.