08/04/2026
Week of July 27, 2026 in Review
The Fed kept rates unchanged, annual inflation eased, and home prices continued to show strength. Here's what you need to know.
Fed Holds Rates Steady, Inflation Shows Improvement
Home Prices Maintain Momentum
At a Glance: GDP and Unemployment
Family Hack of the Week
What to Watch Ahead
Fed Holds Rates Steady, Inflation Shows Improvement
At Kevin Warsh's second meeting as Fed Chair, the Federal Reserve voted to keep its benchmark Federal Funds Rate unchanged at 3.50% to 3.75%. This marked the fifth consecutive meeting without a rate change, following a series of cuts late last year.
While the Fed Funds Rate does not directly set mortgage rates, it influences borrowing costs throughout the economy and helps shape the broader interest rate environment.
The decision to hold rates steady was widely expected, but the vote was not unanimous. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan supported a quarter-point rate hike, citing in part concerns about ongoing Middle East tensions and the potential for rising energy prices to keep inflation elevated.
There was encouraging news on the inflation front. Headline Personal Consumption Expenditures (PCE) declined 0.1% in June, matching expectations and bringing the annual inflation rate down from 4.1% to 3.7%. Lower energy prices contributed to the softer headline reading, but underlying inflation also improved. Core PCE, which excludes food and energy prices, rose just 0.1% for the month, slightly below forecasts, while the annual core inflation rate eased to 3.3% from 3.4%.
Bottom line: While June's PCE report showed inflation moving in the right direction, it remains above the Fed's 2% target. Policymakers continue to balance bringing inflation lower while avoiding unnecessary strain on a labor market that has shown signs of slowing.
Home Prices Maintain Momentum
Following solid gains in March and April, U.S. home prices increased another 0.6% from April to May per Case-Shiller, bringing the total gain over the past three months to 2.2%. After adjusting for normal seasonal patterns, prices were essentially flat, but home values remain 1.1% higher than they were a year ago.
A separate report from the Federal Housing Finance Agency (FHFA) showed a similar trend. On a seasonally adjusted basis, home prices rose 0.3% in May, while actual prices increased 0.8%. That followed gains of 0.7% in April, 1.0% in March, and 0.9% in February, for a combined increase of 3.4% over the four-month period. Compared to a year ago, prices for homes backed by conventional loans were up 2.2%.
Bottom line: While seasonal adjustments can make price growth appear more modest, home values have continued to trend higher this spring. For both homeowners and buyers, steady appreciation can add up over time. For example, a $500,000 home that appreciates 4% over a year would increase in value by about $20,000.
At a Glance: GDP and Unemployment
The first estimate of second quarter GDP showed the economy grew at an annualized rate of 1.5%, below expectations of around 2% and slower than the 2.1% pace recorded in the first quarter.
Growth was supported by consumer spending, business investment (particularly in AI data center construction) and exports. Those gains were partially offset by lower government spending, while higher imports also weighed on GDP because imports are subtracted in the GDP calculation.
On the labor front, initial jobless claims edged up to 197,000, while continuing claims dipped slightly to 1.782 million. The relatively low level of new unemployment claims may reflect workers who have shifted to gig or freelance jobs, which aren't always fully captured in traditional employment data. At the same time, the elevated number of continuing claims suggests many unemployed workers are still taking longer to find their next job.
Family Hack of the Week
Celebrate National Peach Month with this Peach and Blueberry Crumble from Food Network. This easy, seasonal dessert serves 5 to 6 people.
Preheat your oven to 350 degrees Fahrenheit. Place 2 pounds of firm, ripe peaches in boiling water for 30 seconds to 1 minute, or until the skins peel away easily, then transfer them immediately to a bowl of cold water.
Peel the peaches, slice them into thick wedges, and place them in a large bowl. Add 2 teaspoons grated lemon zest, 2 tablespoons fresh lemon juice, 1/2 cup sugar, and 1/4 cup all-purpose flour, then toss to combine. Gently fold in 1 cup fresh blueberries and let the mixture rest for 5 minutes before spooning it into ramekins or custard cups.
For the topping, combine 1 cup all-purpose flour, 1/3 cup sugar, 1/4 cup lightly packed brown sugar, 1/2 teaspoon kosher salt, 1/4 teaspoon cinnamon, and 1/4 pound cold unsalted butter. Mix until the butter is pea-sized, then rub the mixture between your fingertips until large crumbles form. Sprinkle the topping evenly over the fruit.
Place the ramekins on a parchment-lined baking sheet and bake for 40 to 45 minutes, or until the topping is golden brown and the fruit is bubbling. Serve warm on its own or with your favorite ice cream.
What to Watch Ahead
Labor market data takes center stage this week. Job openings will be released Tuesday, followed by private sector payrolls on Wednesday and weekly jobless claims on Thursday. Attention then shifts to Friday’s closely watched employment report, featuring nonfarm payrolls and the unemployment rate.
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