Weekly Mortgage Rates

December 16, 2025

Inconceivable!

Feeling like Vizzini from The Princess Bride after today’s job report painted a bleak employment picture that would have normally moved rates lower- but they barely moved.

November showed 64k jobs added (slightly higher than expected) but the October reading showed a loss of 105k jobs and revisions were made lower for both August and September numbers. The unemployment rate rose from 4.4% to 4.6%. Wage growth also slowed down considerably- signaling weak hiring competition and lower inflation ahead. All very bond friendly news, normally.

The bond market, so far, seems to be discounting these reports. Powell, at the recent Fed meeting, warned not to put too much weight on these reports since shutdown delays caused some muddling of the data collection and the October drop reflects delayed government layoffs announced earlier this year.

All this makes the next jobs numbers for December due out on Jan 9^th more important than usual. It will be a full month of data without the government shutdown to skew the numbers.

Fed Meeting Recap

The December Fed meeting also had little impact on mortgage rates. The economic projections showed they anticipate slightly better growth in 2026, slightly lower inflation, and the unemployment rate to remain about the same. 

Like we discussed last week, in a K shaped economy there is tension between the Fed’s goals to both support employment and keep inflation under control. Powell acknowledged this challenge saying it calls for a neutral policy where they’re not being accommodative or restrictive with their interest rate, and they feel that they are in this neutral range now.

Not QE

The Fed also announced a new program to purchase 40 billion a month of Treasury bills under the Fed’s new “Reserve Management Purchase” program, otherwise known as- not QE.

Taking a walk down memory lane- Since 2008 markets have had Fed intervention with Quantitative Easing (QE) by the Fed’s bond purchase program that kept rates artificially lower than they would have otherwise been. They tried to dial this back in 2018 but had to quickly jump back in due to market liquidity issues. QE ballooned during the Covid era. Post Covid we have been in a Quantitative Tightening mode (QT) to reduce the holdings. Just 12 days after QT has ended, citing market liquidity issues, the Reserve Management Purchase program began. 

Of note, the bond purchases are all shorter dated treasuries, so they are not directly purchasing long term bonds- like mortgage bonds, yet.. It could still help mortgage rates because the Treasury is likely to issue more bond supply on these shorter dated treasuries and this will allow them to issue less longer dated treasuries which would help mortgage rates as the supply decreases.

The Treasury issues the debt and the Fed purchases it, doesn’t sound like QE to me.

What’s Ahead

There is still a lot of economic data to sift through for the remainder of the week with inflation on Thursday and QCEW revisions to jobs data on Friday. QCEW updates the monthly job reports that reflects a more accurate reading on labor, but again it is old data now. Powell said the employment data has been drastically overstated in recent months. Perhaps he had a preview of what is in the report already. Will any of it matter? We will see.