"The U.S. economy is doing pretty well on paper, even if that's not how it feels to many Americans. December saw the labor market adding fewer jobs than expected, though unemployment eased up a bit, at least. And while it's still above the Federal Reserve's 2% target, inflation has remained in line with expectations. At their Jan. 27-28 meeting the Federal Reserve opted to maintain the federal funds rate's current level."
"The Fed felt good enough about the job market to pause its rate cuts last month. Good enough, in fact, to remove language about rising risks to employment from its official statement. That sounds super mild, but trust me, it's a significant vote of confidence - even if many of us are a lot less confident. A stable economy and a Federal Reserve that's in wait-and-see mode is a recipe for mortgage rates to remain steady."
The overall economy is on relatively stable footing, reducing the likelihood of significant mortgage rate movement in February. December data showed fewer job additions than expected while unemployment eased and inflation remained near expectations. The Federal Reserve maintained the federal funds rate at its Jan. 27-28 meeting and paused a streak of rate cuts because the labor market appeared resilient, even removing language about rising employment risks. That combination of economic stability and a wait-and-see Fed has kept average 30-year mortgage rates just over 6%, suggesting rates will likely stay in a narrow range absent major market shocks. Fed leadership changes could introduce market volatility.
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