Key Economic Updates to Watch This December
As we head into December, several major economic reports and Federal Reserve decisions are shaping the outlook for interest rates and the housing market. Here’s a breakdown of what happened this week and what to keep an eye on as we approach year end.
▶️ Watch the Video
For a quick overview, check out this week’s Mortgage Minute on YouTube:
Mortgage Minute: Key Economic Updates to Watch This December
As we head into December, several major economic reports and Federal Reserve decisions are shaping the outlook for interest rates and the housing market. Here’s a breakdown of what happened this week and what to keep an eye on as we approach year end.
September PCE Data Arrives With Minimal Market Reaction
After delays caused by the government shutdown, the September Personal Consumption Expenditures (PCE) report was finally released. Markets took the data in stride, reacting with little movement. Inflation came in slightly elevated but still within analyst expectations, which helped maintain the positive momentum we’ve seen after three consecutive weeks of improving interest rates.
This steady response suggests that investors may be growing more confident that inflation is trending in the right direction, even if progress is gradual.
Calm Markets Continue After Weeks of Rate Improvement
The muted reaction to the PCE data aligns with the overall tone in the mortgage market. We’ve experienced three straight weeks of interest rate improvement, and the lack of volatility around this release reinforces a sense of cautious stability. This is welcome news for buyers who have been waiting for more favorable borrowing conditions.
Fed Meeting Coming Up:
All eyes now turn to the upcoming Federal Open Market Committee (FOMC) meeting on December 9–10, 2025. The central question: Will the Fed cut interest rates again?
Current market pricing shows an 86–87% probability of a 0.25% rate cut, which would mark the third consecutive reduction. However, as always, nothing is guaranteed. The Fed remains data-dependent, and recent comments from Chair Powell suggest they are not ready to lock in a definitive path forward.
The Next Jobs Report May Be the Real Market Mover
While the Fed meeting is front and center, the report with the potential to make the biggest impact may come shortly afterward. The November 2025 employment report is scheduled for release on Tuesday, December 16, 2025, at 8:30 AM ET.
Jobs data is one of the most significant indicators the Fed monitors when evaluating the health of the economy and, by extension, the appropriate stance for interest rates. Strong or weak numbers could shift expectations quickly.
What This Means for Borrowers and Homebuyers
Overall, the combination of stable inflation readings, ongoing rate improvement, and high expectations for a potential Fed rate cut sets the stage for a potentially more favorable mortgage environment. Still, markets can shift quickly, especially with key data releases on the horizon.
If you’re considering a home purchase, refinance, or investment property move, staying informed over the next two weeks will be essential.
We’ll Keep You Informed
As always, we’ll continue monitoring the data and providing guidance as conditions evolve. If you have questions about how these economic updates impact your mortgage options or financial plans, we’re here to help.
Let’s Talk Next Steps
Whether you’re thinking about buying soon or planning ahead, I’d be happy to walk you through your options, run updated numbers, and help you understand where rates and affordability may be heading.
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Written by John Pyne, SVP Regional Manager and Mortgage Advisor based in Northern Virginia. Specializing in first-time buyers and strategic financing solutions for clients across the DC Metro area.