MARKET UPDATE: 10-19-2026

Inflation Heats Up, Home Sales Edge Higher

Hotter-than-expected inflation, a rebound in existing home sales, and the story behind the retail sales numbers. Here’s what you need to know.

  • Hotter Inflation Puts the Fed in Focus
  • Existing Home Sales Post Modest Gain
  • Quick Look: Consumer Spending and Unemployment
  • Family Hack of the Week
  • What to Watch Ahead

Hotter Inflation Puts the Fed in Focus

Inflation picked up in September, with the Consumer Price Index (CPI) rising 0.6% from the previous month, largely due to higher gas and energy costs. Annual inflation increased from 3.4% to 3.7%, coming in above expectations.

Core CPI, which excludes food and energy, rose 0.3% for the month and 2.6% over the past year — also hotter than economists expected.

Wholesale inflation surprised to the upside too. The Producer Price Index (PPI) rose 1.3% in September, more than twice the expected increase. Annual wholesale inflation climbed from 5.6% to 6.3%, while core PPI rose 0.7% for the month.

Bottom line: The Fed raised its benchmark Federal Funds Rate by 25 basis points in September, in part due to persistent inflation. Meeting minutes also suggested that most members saw another rate hike as appropriate by year-end. Remember, the Fed Funds Rate is the overnight borrowing rate for banks — it’s not the same as mortgage rates.

With two Fed meetings remaining this year, on October 27–28 and December 8–9, investors will be watching closely to see how the latest inflation reports influence the Fed’s next move.

Fed Chair Kevin Warsh spoke later in the week and said the economy has largely performed as expected since the September rate hike, without directly addressing the hotter-than-expected inflation reports. Markets appeared to interpret his remarks as a sign the Fed could hold rates steady in October, though expectations can shift quickly as new data comes in.

Existing Home Sales Post Modest Gain

Existing home sales rose 1.5% from August to September, ending a three-month slide. However, sales remained 2.2% below year-ago levels, reaching a seasonally adjusted annual rate of 3.99 million homes.

The number of homes available for sale also continued to climb, rising 1.9% from August and 4.6% from a year earlier.

Bottom line: National Association of REALTORS® Chief Economist Lawrence Yun noted that August and September were the slowest months for home sales this year, despite September’s monthly gain. He also pointed to rising inventory and longer selling times as factors giving buyers more negotiating power.

Quick Look: Consumer Spending and Unemployment

Retail Sales: Retail sales rose 0.8% in September, more than double expectations. But the report measures total dollars spent — higher gas prices helped boost the overall number by increasing sales at gas stations. Excluding gasoline, retail sales grew just 0.2%, suggesting consumer spending may not be as strong as the headline number indicates.

Unemployment: Initial claims remained low at around 199,000, but these figures may not capture everyone looking for work — some people who lose their jobs may turn to freelance or gig work rather than file for unemployment benefits. Continuing claims held near 1.71 million; although they have declined from recent highs, that drop may reflect workers exhausting their benefits rather than finding jobs.

Family Hack of the Week

Enjoy these apple muffins, courtesy of Allrecipes — perfect for National Apple Month and all fall long. This easy recipe makes 6 large muffins. Preheat the oven to 425°F and line 6 large muffin cups with paper liners. Stir together flour, sugar, baking powder, cinnamon, and salt; add egg, oil, and milk; then fold in chopped apples and spoon the batter into the cups. Top with a cinnamon-sugar-butter crumble, bake 5 minutes, reduce the heat to 350°F, and continue baking 25–30 minutes until a toothpick comes out clean.

What to Watch Ahead

Several key housing market reports are on tap this week. Monday brings home builder confidence data from the National Association of Home Builders, followed Tuesday by updates on Housing Starts, Building Permits, and Pending Home Sales. On Thursday, the latest jobless claims data will offer another look at labor market conditions.