Inflation Cools Again, Markets Stay Steady Ahead of Next Week’s Fed Meeting

Mortgage markets remain steady this week as several delayed economic reports finally made their way out following the government shutdown.

The headline reading was the September PCE inflation report, which came in exactly as expected and continues the broader cooling trend we’ve seen this year. Core PCE, the measure the Federal Reserve pays closest attention to, eased from 2.9% to 2.8% year over year.

Labor market data was mixed. ADP reported 32,000 job losses in November, job-cut announcements hit their highest levels since the pandemic, and continuing unemployment claims remain near multi-year highs. Weekly jobless claims appeared strong, but the holiday distortions made the numbers unreliable.

Bond markets barely moved on the news. Mortgage Bonds continue to trade against a stubborn ceiling that has only been broken once in the past year, while the 10-year Treasury remains stuck between 4.00% and 4.15%. This narrow range reflects a market waiting for clearer direction from next week’s Federal Reserve meeting.

A rate cut is widely expected at that meeting, but because markets have already priced it in, it may not meaningfully change mortgage pricing. What will matter more is how Jerome Powell talks about the path forward. Markets are looking for clarity on whether additional cuts are likely in early 2026, or whether the Fed plans to pause until more data arrives.

Looking ahead, the next real opportunities for improvement come on December 16 and 18, when updated jobs and inflation data arrive. If both reports show meaningful softening, the market could finally push through its recent barriers.

For buyers, this means a period of relative stability heading into year-end. For homeowners tracking refinance opportunities, the Strike Rate system continues monitoring scenarios daily to identify lower-payment opportunities as they emerge.