March was basically interest rates doing their best impression of a SpaceX launch—straight up, no brakes. April? More like a cautious jog. Still moving, just not trying to break anything.
By the end of this past week, most lenders had nudged rates slightly lower. Nothing dramatic—don’t go popping champagne—but at least things calmed down a bit. Even better, the usual chaos between daily rate changes and weekly surveys finally synced up. (About time.)
Now let’s not kid ourselves—the war with Iran is still the main character here. Everything else is just a side plot.
The real issue? Inflation. And more specifically, oil-driven inflation.
Earlier in the week, we got a little teaser of hope when ceasefire news dropped. Oil prices dipped fast, and interest rates followed like an obedient puppy. But then reality stepped back in. The ceasefire started getting shaky, tensions crept back, and—surprise—so did rates.
And if you thought we were anywhere close to undoing the damage from all this… yeah, not even close.
Now here’s where things get a bit more annoying.
Unlike last week (where inflation fears were mostly vibes and speculation), this week actually delivered the goods—real data showing inflation heating up.
The Consumer Price Index (CPI) came in hot on Friday. Not just “a little spicy,” but the highest year-over-year reading since 2024.
At first glance, the chart doesn’t look terrifying. But here’s the problem:
The bond market was hoping for monthly inflation around 0.2% or less.
Instead, it got something over 4x that pace.
That’s not a miss. That’s a complete breakdown in communication.
And it’s not just CPI waving red flags.
The ISM Services report—specifically the price index—also decided to join the party, hitting its highest level since 2022.
Even worse, the month-over-month jump was massive. ISM hasn’t seen a move like that since 2012. That’s not “normal fluctuation”—that’s “something just changed” territory.
Looking ahead, next week is basically a ghost town for economic data.
Which sounds nice… until you realize what that means.
No distractions.
No buffer.
Just markets staring directly at oil prices and geopolitical headlines like it’s a Netflix thriller they can’t pause.
If energy prices behave, rates might chill.
If not? Strap in.