What Happened Last Week?
Anyone Who Tells You They Know What Happens Next for Rates is Lying
Friday saw mortgage rates move back up near the highest levels of the week, and thus the highest levels of the past 3 months. Thus ends another week where mortgage rates end higher despite a Fed rate cut. This horse has been beaten to death, but the two key reasons Fed rate cuts don’t necessarily result in lower mortgage rates, in as few words as possible, are: different kinds of rates and vastly different levels of timeliness. All told, last week’s Fed announcement had only a small, temporary impact on financial markets, and it was completely reversed on Friday.
Source: Matthew Graham, Mortgage News Daily 12/12/2025)
What’s on the Agenda for This Week?
Three Things
The three areas that have the greatest ability to impact your backend pricing are: (1) Jobs, Jobs, Jobs, (2) Retail Sales, (3) Inflation Nation.
(1) Jobs, Jobs, Jobs: It’s Big Jobs Friday, but on a Tuesday! It includes Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate, Labor Force Participation rate and more.
(2) Retail Sales: This is older-delayed October data but it is very important.
(3) Inflation Nation: CPI and Core CPI will be on Thursday. The Atlanta Fed Business Inflation Expectations and the UofM Consumer Sentiment Inflation Expectations will also be this week.
Market Wrap-up
Domestic Flavor
Taking it to the House: December Home Builders’ Sentiment remained in the basement (pun intended) with a sub-40 reading of 39.
Rosie the Riveter: After a rare spike in Manufacturing in the NY Fed District in November, it cratered in December from 18.7 down to -3.9.
On Deck for Tomorrow: Big Jobs Friday (but on a Tuesday). NFP, Unemployment Rate, Average Hourly Earnings, ADP Weekly Change, Retail Sales, Housing Starts and Building Permits.
The Talking Fed
Fed Gov Miran said he would stay on after his term while Trump finds a replacement for him and that he does not see tariffs as an inflation driver. NY Fed President Williams believes the current 3.50–3.75% Fed funds range is suitably “modestly restrictive,” anticipating inflation to ease toward 2.5% in 2026 and 2% in 2027. Growth holds near 2%.