The Bureau of Labor Statistics (BLS) is responsible for the two most important economic reports to the bond market: The Employment Situation (aka jobs report or NFP) and The Consumer Price Index (CPI). This week marks the return of more timely installments of these reports with NFP on Tuesday (still not 100% timely, but only a week and a half late) and CPI on Thursday.  In addition, we’ll get October’s retail sales data at the same time as NFP. This combo of data could easily set the tone through the 2nd week of January, for better or worse.
If the data sends a unified message that’s economically stronger (higher jobs, higher inflation), an unfriendly range breakout becomes likely. In the opposite scenario (weaker jobs, lower inflation), yields would be more likely to simply retreat into the range.  To some extent, these reports may be taken with a grain of salt because they’re the first new collections of these data sets post-shutdown.

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Mortgage rates were just slightly lower to start the new week. This leaves the average lender’s top tier 30yr fixed rate almost dead center in the narrow range that’s been intact since early September. The absence of any significant movement on Monday is a logical outcome given the absence of any major economic data releases or headlines. But Tuesday could be a different story. At 8:30am ET, the Bureau of Labor Statistics (BLS) will release the first jobs report with data collected after the government shutdown. This report normally would have come out on December 5th, but by the time the government reopened on Nov 13th, BLS had missed much of its normal data collection/processing window. The jobs report (officially, The Employment Situation) is the single most important piece of economic data as far as interest rates are concerned. It includes 2 key metrics: a count of new nonfarm payroll (NFP) creation as well as an update on the unemployment rate. Both are important, but the unemployment rate has recently taken precedence over NFP. If unemployment comes in lower than expected, rates would likely face upward pressure, potentially challenging the upper boundary of the recent range. On the other hand, a weaker/higher result should keep rates well within the range, perhaps near the lower boundary. [thirtyyearmortgagerates]

After home equity surged in 2023, average gains slowed last year before falling into negative territory over the past 12 months, Cotality said.

Rohit Chopra is named senior advisor to the Democratic Attorneys General Association’s working group on consumer protection and affordability; Flagstar Bank adds additional wealth-planning capabilities to its private banking division; Chime promotes three members of its executive leadership team; and more in this week’s banking news roundup.

For 2026, the mortgage industry operating environment will improve, while nonbank financial metrics should be within Fitch’s rating criteria sensitivities.

The Department of Housing and Urban Development announced the FHA-insured loan caps for low- and high-cost areas, which are set based on conforming loan limits.

The executive order described state legislation on artificial intelligence as a cumbersome patchwork, and pledged to develop a national framework.

Friday saw mortgage rates move back up near the highest levels of the week, and thus the highest levels of the past 3 months. Thus ends another week where mortgage rates end higher despite a Fed rate cut. We’ve beaten this horse to death, but here are the two key reasons Fed rate cuts don’t necessarily result in lower mortgage rates, in as few words as possible:
 Different Kinds of Rates

Fed Funds Rate = loans of 24 hours or less. 
Mortgage rates = loans up to 30 years. 
Rates can have vastly different behavior when they apply to loans of vastly different time frames

Vastly different levels of timeliness

Fed only meets to consider rate cuts 8 times a year whereas mortgage rates move daily. 
As such, mortgage rates can get in position well in advance of the Fed actually cutting.

All told, this week’s Fed announcement had only a small, temporary impact on financial markets, and it was completely reversed on Friday. In contrast, the upcoming week actually has significant new market movers. These include Retail Sales for October, CPI inflation data for November, and the much-anticipated November jobs report (as well as half of the October jobs report). Unlike the Fed rate cut, markets can’t accurately predict how these reports will come out. If they’re mostly stronger than expected, rates will break up and out of their recent range. If the reports are weaker, rates should retreat back down into that same range.

There’s a noticeable divergence between long and short term bonds since the Fed announcement, and it’s becoming more pronounced today.  We can consider a few different reasons with the most basic being that the Fed rate cut outlook keeps shorter-term yields locked down at lower levels thus forcing the long end of the curve to absorb more of the selling impulse on selling days. As far as 2yr yields are concerned, it’s not even really a selling day (they’re currently DOWN microscopically). Meanwhile, 10yr yields are almost 4bps higher.

We can also consider an underlying concern among traders that was encapsulated in a comment this morning from Fed’s Goolsbee, who said there was little to suggest the labor market was decaying fast enough to warrant this week’s rate cut, especially in the absence of more timely econ data. The tacit conclusion is that if next Tuesday’s jobs report is strong, markets will increasingly feel like the Fed just made a mistake.  Last but not least, the least stressful thesis is that 2025 ended on Fed day and everything we see between now and the 2nd week of January is noise.  Choose your own adventure.