Although mortgage rates remain below the 7% mark, they ticked up this week ahead of the next inflation report. While recent reports suggest a slowdown in economic activity is underway, new economic data due this week is expected to show the US economy accelerated in the second quarter. Beyond that, the producer price index (PPI) came in stronger than expected in June following an upward revision in May. The PPI, which reflects prices producers can command for their goods and services in the open market, is considered a leading indicator of changes in the PCE price index — the Fed’s preferred inflation gauge.

Fed fund futures currently indicate traders are pricing in three rate cuts before the end of the year. But accelerating economic growth, higher-than-anticipated inflation readings, and fewer rate cuts could drive Treasury yields higher.

This week’s release of the latest Personal Consumption Expenditures (PCE) data will likely cause investors to adjust their inflation forecasts. Any uptick in core inflation — measured by the PCE price index — could cause rates to move back up.