More labor sector data is pointing to growing softness in the job market, while the latest inflation figures came in largely as expected.

The Fed cut short-term interest rates for the 3rd time in 2025, admitted that the BLS jobs numbers were probably “overstated,” and announced the resumption of short-term asset purchases — all good news for bond yields (and by extension, mortgage rates).

The MBS Highway National Housing Index rose 3 points in December 2025 to 27. A year ago, the index stood at 32. Lower mortgage rates have yet to significantly boost transaction activity, but should provide a tailwind as the seasonal upswing gets going in January.

The Fed delivered a second straight rate cut in October, but uncertainty around December’s policy decision is growing as officials weigh persistent inflation against mounting signs of labor-market weakness.

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