Mortgage rates saw significant improvements in 2025, but will that continue this month? Here's what to know now.

Federal Reserve policy committee members need to see inflation fall further before they move to cut interest rates again, minutes from their December meeting showed.

In addition, deportations may be impacting the numbers and leading to lower job growth, but in a way that might present lower economic risk. That said, unemployment continues to move up, now to 4.6% and even though the increase has been gradual up to November’s report, rising unemployment has historically elevated recession risk.

At their December 9-10 meeting, Fed officials agreed to cut their key interest rate by a quarter point for the third time this year, to about 3.6%, the lowest in nearly three years.

Officials at the central bank have splintered over whether rising unemployment or elevated inflation poses the bigger economic risk.

Federal Reserve policymakers were split on December's rate cut decision, with multiple dissents revealing disagreements over inflation and labor risks.

Fed rate cuts could ease credit card and deposit rates, but auto loans and mortgages may stay high due to risk and long-term inflation expectations.

The Bank of Israel unexpectedly cut its interest rate by 25 basis points on Monday, a second successive cut after lowering it in November for the first time in nearly two years, citing an improving inflation environment after the Gaza ceasefire.