Weekly Market Commentary (For the Week Ending 8/15/25)

Rates Up slightly this week, no changes to benefit amounts!

The 10YR CMT moved back up slightly this week, but we will see NO CHANGE in the 10YR CMT for next week. This will result in NO CHANGE to PRINCIPAL LIMITS and BENEFIT AMOUNTS next week!!

The 10YR CMT currently sits at 4.23% for this week, and we should see an increase of 4-6 bps in the Expected Rate next week! This will have NO IMPACT on the Expected Rate and will result in the SAME Principal Limits and Benefit Amounts next week!!

Lots of numbers for the markets to digest this week as the Consumer Price Index (CPI) numbers for the month came out on Tuesday and the Producer Price Index (PPI) numbers came out on Thursday.

CPI numbers increased only 0.2% at 2.7% and core CPI was up 0.3% to 3.1%. This adds to the argument that reacceleration of inflation from higher tariffs has been less pronounced than first feared, but this impact is expected to increase moving forward unless more firms are willing to take a more prolonged hit to their margins.

PPI numbers came in well above expectations, increasing by 0.9%, the largest increase since June, 2022. PPI numbers are a leading indicator of consumer prices over time, and to analysts, this signals an early sign of the impact of tariffs on company costs. Some companies may choose to continue absorbing the higher prices and lower margins, while others may choose to pass along these higher prices to consumers.

All in all, the markets are still pricing in a 92% probability of a September rate cut; however the probability of additional cuts in October and December are falling. But, many analysts still predict two rate cuts before year end.

While inflation remains uncertain, many believe the FED will shift its focus to recent softenings in the job market and will not want to risk labor falling into a lengthy slump. Next week is also the FED’s annual Jackson Hole symposium, which is a likely forum for the FED to signal any upcoming shifts in its current interest rate policy.

This week, the 10YR CMT Index is 4.23%. Here is what the 10YR CMT has done this week, so we will see an INCREASE in the 10YR CMT for next week. This increase WILL HAVE NO IMPACT on Principal Limits!

10YR CMT               

8/11/25     8/12/25    8/13/25    8/14/25     8/15/25 (Intraday)

  4.27          4.29        4.24        4.29          4.32   

Based on the data from this week, we will see an INCREASE in the Expected Rate of 4-6 bps for next week. This INCREASE will have NO IMPACT on the Principal Limits and Benefit Amounts for next week. So, if you have applications to take, there will be NO DIFFERENCE IN BENEFIT AMOUNTS FOR YOUR CUSTOMERS IF YOU TAKE APPLICATIONS NOW OR WAIT UNTIL NEXT WEEK TO TAKE YOUR APPLICATIONS!!  As usual, new rates for next week will take effect on Tuesday, 8/19/25 and beyond! And, as always, we are simply providing this data to you, so that YOU can continue to make the decisions that best suit your business based on the information you have!

If you have questions about this, please let me know right away!!! Thanks for the partnership and Good Selling!!!