With June's inflation reading coming in hotter than the month prior, the Fed is under renewed pressure to maintain its current target range for the federal funds rate. Analysts now see little chance of a rate cut in the near term. That means HELOC borrowers are unlikely to see significant rate drops anytime soon.

Rising prices across an array of goods from coffee to audio equipment to home furnishings pulled inflation higher.

What is clear is that the current 4.33% median Fed funds target rate remains well above the inflation trend. Even after the acceleration in consumer prices in June, the policy rate is roughly 1.4 percentage points above headline CPI’s one-year change – close to the biggest gap post-pandemic.

The inflation gauge the Federal Reserve relies on most to decide whether to raise or lower U.S. interest rates is likely to cement a decision by the central bank to stand pat at its next meeting at the end of July.

With the Federal Reserve's July meeting on the horizon, many prospective homebuyers and homeowners are wondering what it could mean for mortgage rates. After years of relatively high borrowing costs, even the slightest dip could open doors for those hoping to buy or refinance. But the path forward is far from clear.

Some investors had clung to a bit of hope that the Federal Reserve would cut interest rates at its next meeting on July 30. Tuesday's report on inflation brought the chances of that down even further.

The U.S. is expected on Tuesday to report that rising costs for imported goods lifted overall consumer prices in June, kicking off what might be several months at least of such increases and giving Federal Reserve officials highly awaited data on whether the Trump administration's tariffs are boosting inflation.

Also in today’s newsletter, US set to ban Chinese tech in submarine cables, and Nvidia chief vows to ‘accelerate recovery’ of China sales

The producer price index for total final demand was unchanged in June, the Bureau of Labor Statistics reported.