Your Mortgage Minute 12/27

Your Mortgage Minute:

• Mortgage rates remained relatively stable this week, with minimal movement despite some key economic data releases
• Initial jobless claims came in lower than expected at 219,000 vs 225,000 forecast, suggesting continued labor market strength which typically puts upward pressure on rates
• Markets maintain expectations for a Fed pause in January, while March remains a close call with roughly 50/50 odds of a cut versus pause
• Next week continues the holiday season quiet period, with weekly jobless claims again being the main notable release

Steady Rates Amid Light Holiday Trading (12/23-12/27)

Mortgage rates held relatively steady this week as holiday-thinned trading kept market movements minimal. The most significant data point was Thursday's initial jobless claims report, which showed continued resilience in the labor market.

Labor Market Remains Strong

Initial jobless claims came in at 219,000, below the expected 225,000 and showing little change from the previous week. This ongoing labor market strength, while positive for the broader economy, typically puts upward pressure on rates as it can contribute to wage inflation. The Fed closely watches these numbers as they evaluate their path forward.

Market Still Split on March Fed Decision

While January's Fed meeting is widely expected to result in a pause, March remains a key inflection point. Current market pricing shows roughly even odds between a rate cut and pause. This uncertainty reflects the complex balance the Fed must strike between controlling inflation and supporting economic growth.

Looking Ahead

Next week maintains the quiet holiday pattern with limited significant economic releases. As with this week, Thursday's initial jobless claims will be the main data point to watch. Trading volumes typically remain light through the New Year holiday, which can sometimes lead to increased volatility despite limited news.

Quote of the week:

"Year's end is neither an end nor a beginning but a going on." - Hal Borland

This quote feels particularly relevant as we head into the season of 'New Years resolutions.' While I'm all for goals and self improvement, I've found a one time a year 'resolution' is unlikely to work when you don't have a continuous follow up to the plan.