Jobs Are Weakening, the Fed Is Watching — and Mortgage Rates Are Holding Steady

Interest rates have remained unexpectedly stable this week, even as more data points to a softening labor market and an extended federal government shutdown.

The Challenger Job Cuts Report showed 153,000 layoffs in October — up 183% from last month and nearly triple last year’s number. Private-sector data from Revelio Labs echoed the slowdown, showing roughly 9,000 fewer jobs in October, largely from government and tech sectors.

Despite these weak readings, mortgage rates barely budged. Bond markets actually improved Thursday after the Bank of England held its benchmark rate steady at 4.00% while signaling that a rate cut could come in December. The move mirrored growing global momentum toward easier policy heading into 2026.

Within the U.S., investors now expect the Federal Reserve to cut rates at its December meeting — a 70% probability based on Fed Funds futures.

Even with the shutdown delaying major data like the BLS jobs report, the broader trend is clear:

• Inflation has cooled from its 2022 highs.

• The job market is softening, especially in government and tech.

• Mortgage bonds remain resilient, with lower-coupon MBS leading the way.

  
  

Freddie Mac’s latest report showed the average 30-year fixed rate at 6.22% and the 15-year at 5.50%, both near their lowest levels in months.

The bottom line:Markets are stabilizing. The Fed is watching. And as long as inflation continues to cool, mortgage rates could hold — or even improve — into year-end.