Rates improve slightly for the week: Investors split on upcoming rate cuts

Happy Friday from Local Mortgage!

It was another somewhat choppy week for the markets, and mortgage rates held in a tight range while drifting just a touch lower. We will end the week with our very best 30-year fixed conventional scenario at 5.875%, down a bit from last Friday’s 5.99%.

For most of the week, bonds traded sideways as investors continued to digest the lingering effects of the data blackout from the government shutdown. Without the usual flow of labor and inflation data, the markets have been reacting to smaller-scale reports and broader sentiment rather than hard numbers.

The biggest driver this week came from the release of the Fed’s October meeting minutes, which confirmed what Chairman Powell hinted earlier this month: that the Fed remains divided. Some officials pointed to softening labor market indicators as justification for another rate cut, while others emphasized sticky inflation as a reason to pause. The result? Investors are still almost perfectly split on whether the Fed will deliver another 25-basis-point cut at the December meeting.

With most of the major economic reports still delayed, the markets are in a bit of a holding pattern. Looking ahead, next week could bring more meaningful movement. The government is expected to announce the catch-up schedule for the missing employment and inflation reports. Once those release dates are set—and once investors can begin absorbing actual data again—we’ll likely see more volatility.

Hope everyone has a great weekend and thanks for reading.