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Markets Watch & Wait — August 15, 2025

Ethan Teng

Ethan Teng

Published August 21, 2025

2 min read

Economic Indicators

The Consumer Price Index (CPI) sits at 322.13, with the Core CPI (excluding food & energy) slightly higher at 328.66. That keeps annual inflation at 2.7%, steady compared to recent months.

Rates remain in focus:

  • Federal Funds Rate → 4.33%
  • 10-Year Treasury → 4.30%
  • 30-Year Fixed Mortgage → 6.58%

Inflation expectations look muted, with forecasts at 2.59% (1 year), 2.13% (5 years), 2.11% (10 years), and 2.30% (30 years).

👉 What this means for you: Prices aren’t surging, but borrowing costs remain high. That means CDs and savings accounts still look decent — but mortgages and loans? Still pricey.

The S&P 500 (SPY) closed at $638.11, down -0.27% for the day, with a trading volume near 89M. The day’s range ran from $632.95 to $639.66, suggesting a cautious but not panicked market.

Treasury yields:

  • 1-Year → 3.91%
  • 5-Year → 3.82%
  • 10-Year → 4.30%

👉 What this means for you: A flat-to-slightly down stock market means investors are holding their breath for Fed clarity. Treasury yields staying near 4% keeps CDs, money markets, and fixed income competitive with equities for many households.

Key Developments

The Federal Reserve’s next move remains the market’s obsession. With the Fed Funds Rate at 4.33%, traders are debating: will the Fed hold steady or start easing?

Mortgage rates tell their own story. They’ve swung this year:

  • Peaked at 7.04% in January
  • Dropped to the mid-6% range by March
  • Hovered between 6.7% and 6.9% since May
  • Closed July at 6.72%, with today’s rate at 6.58%

👉 What this means for you: If you locked in a mortgage before January, congrats — you dodged the 7% spike. If you’re house-hunting now, rates are slightly better, but affordability is still strained.

Market Outlook

Today’s data paints a picture of moderate inflation + steady-but-high rates + cautious equity markets. Nothing dramatic — but the backdrop is tense. The Fed is walking a tightrope: too much tightening risks slowing growth, too little risks inflation re-heating.

👉 What this means for you:

  • Savers: enjoy those higher CD/money market yields while they last.
  • Borrowers: mortgages and loans will likely stay expensive, at least through year-end.
  • Investors: expect choppiness. Stocks may drift until the Fed makes its next move clear.

💡 Bottom line: We’re in a “hurry up and wait” market. Inflation is steady, mortgage rates are stubborn, and the Fed still holds the keys.