Fed Chair Powell told a House Select Subcommittee on the Coronavirus Crisis this week that inflation is still seen as transitory, despite recent data showing big increases over last year.

Powell also reaffirmed the Fed's intent to encourage a "broad and inclusive" job market recovery and to avoid interest rate increases based only on fear of coming inflation.

Unemployment claims resumed their downward trend last week, after rising slightly in the prior week. The labor market continues to head toward a full recovery.

The Fed kept policy rates unchanged at this month's meeting, but more officials forecast rate increases in 2023. The markets' response to Fed comments pressured rates higher.

Inflation concerns grew this week, as May's producer prices rose at their fastest annual clip in nearly 11 years. Inflation increases are bad for mortgage rates, pushing them higher.

Jobless claims continue to come in closer to what economists consider a normal range, a sign that the labor market continues to improve despite high continuing claims numbers.

Consumer prices were up 5% year over year in May, the fastest pace since August 2008. Prices are rising as a rush of demand meets shortages in materials and labor.

The core inflation rate, which strips out food and energy prices, rose 3.8% annually, the sharpest increase in nearly three decades due to last year's pandemic-related shutdown.

The labor market recovery continues to gain steam. Unemployment claims fell for the 6th straight time last week, hitting the lowest level in nearly 15 months.

Homeowner equity has more than doubled over the past decade, according to CoreLogic. Home prices were up 11% in March and 13% in April, the sharpest gains since 2006.

More than 21,000 homes are going up in a new California community that will be the largest net-zero carbon emissions community in the nation, according to the developer.

Purchase mortgage application volume was essentially flat last week. Overall applications fell, with refinance applications down 5% for the week and 27% year over year.

The core PCE rose 3.1% in April, more than expected. The index is generally considered a wide-ranging measure for inflation, and its growth reflects economic expansion.

Oil prices are rising, supported by an OPEC+ decision to restore supply to the market gradually and by the slow pace of nuclear talks between Iran and the U.S.

According to the Fed, the economic recovery picked up steam in the past 2 months, sparking price pressures as businesses contended with labor shortages and rising costs.

Consumer confidence hovered at a 14-month high in May, as optimism over jobs tempered concerns about rising inflation and diminishing government financial stimulus.

Durable goods orders fell in April, the first time in a year. However, the decline was mainly due to a drop in the automotive sector, where an ongoing microchip shortage is an issue.

The labor market continues to show signs of rebounding. Last week's initial jobless claims dropped more than expected to 406,000, a new pandemic low.

Existing home sales fell for the third straight month in April. Demand remained strong, but sales were constrained by inventory, which was down 20%.

Pending home sales also fell in April. Elevated asking prices, reflecting the limited supply of homes on the market, are making properties less affordable and curbing sales.

Home price appreciation is accelerating as buyers continue to fight for limited inventory. Case-Shiller showed a year-on-year gain of 13.3% in March, up from 12% in February.