Wholesale Inflation Heats Up in January
Wholesale prices climbed faster than expected in January, with core producer prices rising 0.8% and headline PPI increasing 0.5%, both exceeding forecasts. On a yearly basis, core prices rose 3.6% and headline prices gained 2.9%, remaining above the Federal Reserve’s 2% target. The increase was driven largely by a surge in services prices, particularly trade services and equipment wholesaling margins, while overall goods prices declined despite higher metals costs. The stronger inflation data pressured stock futures and may keep the Fed cautious on interest rates amid ongoing debate over tariffs and monetary policy.
Lower Rates Boost Refis, Buyers Hold Back
Mortgage rates fell to 6.09% last week, the lowest since September 2022, but overall mortgage application volume rose just 0.4%. Refinancing activity climbed 4% for the week and surged 150% year over year, though that comparison reflects very weak refi demand a year ago. In contrast, purchase applications dropped 5% from the prior week despite being 12% higher than a year ago, as elevated home prices and economic uncertainty weighed on buyers. Rising contract cancellations and increased interest in adjustable-rate mortgages suggest affordability pressures are still shaping consumer behavior.
Oil Jumps on Escalating Middle East Conflict
Oil prices surged to fresh 52-week highs after continued U.S. and Israeli strikes on Iran heightened fears over global supply disruptions. Brent crude climbed more than 7% to around $78–$80 per barrel, while West Texas Intermediate rose above $72, lifting shares of major energy companies worldwide. Analysts say the key risk centers on the Strait of Hormuz, which carries roughly 20% of global oil flows, though a full closure is seen as unlikely. However, targeted attacks on tankers or energy infrastructure could push prices toward $100 if disruptions intensify or the conflict drags on.
As always, Base Wealth Management remains focused on aligning investment strategies with your long-term goals amid evolving market conditions.
