It sounds as though your tree has peach leaf curl, a fungal disease that is most prevalent in a cool, wet spring following a mild winter. New leaves are distorted and puckered and have a reddish cast. Leaves turn yellow or brown and drop. Peach leaf curl weakens peach and nectarine trees by causing early leaf drop, making the tree more susceptible to other diseases and winter injury. Fruit production the following year is usually reduced, because trees are stressed from the leaf drop. It's easy to control peach leaf curl with a dormant spray just as buds are beginning to grow. By the time you see the puckered red foliage, it's too late to do anything for the crop. Rake up and destroy fallen leaves to help cut down on the amount of fungal spores overwintering under the tree, and apply a fungicide in late winter next year to prevent a recurrence of the disease.