Portland Mortgage Market Update — February 20, 2026

Wow- it was a busy Friday! PCE, GDP and Tariffs all lead the day today. Going in order, the PCE (Personal Consumption Expenditure) report for December dropped today and is the Fed's preferred measure of inflation. After last week's promising CPI report, the market was expecting a rise of 0.3%, but it came in hotter than that due to…. Streaming services? Yes, streaming services like Netflix and Apple TV showed an increase of almost 20% month over month which helped pave the way to a higher than expected increase of 0.4%. The initial Q4 GDP reading was also released today which came in much weaker than the 2.8% expected at 1.4%. This was dragged down by a low government spending number which was due to the shutdown. The market is doing a good job taking these reports in stride, mainly because they are trying to figure out how to handle the tariffs boondoggle.

Liberation Day deemed Illegal! The Supreme Court issued their ruling on President Trump's Tariffs this morning, saying that Trump invoked most of the tariffs by stretching the boundary of the Internation Emergency Economic Powers Act (IEEPA). By saying he invoked the IEEPA in bad faith to institute the tariffs, they are illegal and now they are null. The market is waiting to see how this will play out because if they were collected illegally, companies now can sue the US government for the estimated $130-150 BILLION collected. Seeming to hedge against this, Trump posted back on Jan 12 that "it would take many years to figure out what number we are talking about and even, who, when, where, to pay… It would be a complete mess, and almost impossible for our Country to pay". We will have to wait and see how this plays out, because the fear is if the US is forced to repay, the likely move is to issue more treasury bills at a higher yield and higher yield= higher rates.

Globally, a potential conflict with Iran could shake things up. There were rumblings this week about the US entering a protracted war with Iran over failed negotiations surrounding Iran's nuclear program and their threat to retaliate against US and Israeli interests. Traditionally, in short-term conflicts there is a flight to safety where foreign investors buy US debt instruments which would drive rates down. However, if there is a protracted conflict that impacts oil supplies that could reverse and rates worsen as local oil prices rise causing inflation. With a weakening labor market, the Fed wouldn't have much room to hike rates which would lead to stagflation which is a very sticky spot to be in.

Don't want to be a Debby Downer, so here is a NEW PRODUCT ALERT: Doctor's Loans!! This is a true 0 DOWN Physician Loan with NO MORTGAGE INSURANCE up to a $2 MILLION loan amount! Good for those in residency as well, so call all your friends at the Mayo Clinic and have them get in touch with me today!