October 27-31, 2025
ECONOMIC UPDATE
Your Guide to the Housing & Mortgage Markets
CHINA TRADE OPTIMISM MAY PULL BACK THE BOND MARKET AS THE FED IS EXPECTED TO CUT SHORT-TERM RATES.
Stocks and bonds both rallied on Friday after the delayed CPI consumer inflation report came out relatively tame. This paves the way for the Federal Reserve to cut rates on Wednesday of this week. However, the Fed only controls short-term interest rates. Mortgage rates are tied to the mortgage bonds that trade in the bond market. Bonds have rallied throughout the summer and early fall, driving mortgage rates down by 0.85% since January of this year, according to Freddie Mac data. This means that mortgage rates have already priced in the likely Fed rate cut this week.
The bad news for mortgage rates is that some of the pressure driving investors toward the safety of bonds may be alleviated if the US and China can come to a trade agreement. That's exactly what seems to be happening, given news headlines this weekend. It appears that trade negotiators for the US and China have come to terms on a range of contentious deal points, setting the stage for US President Trump and Chinese President Xi to finalize a trade deal at their upcoming meeting later this week. This news and the outcome of the trade talks will likely drive market sentiment this week. This also means that mortgage rates may actually go up after the Fed cuts short-term rates on Wednesday.
THIS WEEK'S ECONOMIC CALENDAR.
Here are the economic reports that may impact mortgage rates this week:
| Date | Report | Period | Prior | Est. | Actual |
|---|---|---|---|---|---|
| Mon 27 Oct | *Durable Goods Orders | Sep | 2.9% | 0.3% | |
| Tue 28 Oct | Consumer Confidence | Oct | 94.2 | 93.5 | |
| Wed 29 Oct | *US Trade Deficit | Sep | -$85B | - | |
| Wed 29 Oct | Pending Home Sales Change | Sep | 4.0% | 1.0% | |
| Wed 29 Oct | Federal Funds Rate | - | 4.25% | 4.0% | |
| Thu 30 Oct | *Initial Jobless Claims | Week ending Oct 25 | NA | - | |
| Thu 30 Oct | *GDP initial est. | Q3 2025 | 3.0% | 3.0% | |
| Fri 31 Oct | *Personal Income | Sep | 0.4% | 0.4% | |
| Fri 31 Oct | *Core PCE month-over-month | Sep | 0.2% | 0.3% | |
| Fri 31 Oct | *Core PCE year-over-year | Sep | 2.9% | - | |
| Fri 31 Oct | *PCE month-over-month | Sep | 0.3% | 0.3% | |
| Fri 31 Oct | *PCE year-over-year | Sep | 2.7% | - | |
| Fri 31 Oct | Chicago PMI | Oct | 40.6 | 42.3 |
*Data subject to delay due to government shutdown.
That's how much mortgage rates have dropped since January, according to Freddie Mac data.
Source: Momentifi