The recent declines in mortgage rates, which have started in late summer ahead of the Federal Reserve’s first cut since December 2024, are largely linked to observers’ expectations of what the central bank will do.

For some investors, they bet on a vehicle known as "Federal Funds futures" to hedge. For others, it's just that — a bet.

The differences have been exacerbated by the government shutdown’s interruption of economic data, a particular challenge for a Fed that Chair Jerome Powell has often described as “data dependent.” The government’s last jobs report was for August, and inflation for September.

The last piece of inflation data the Federal Reserve will see before its pivotal December meeting to debate another interest-rate cut showed just a mild increase in wholesale prices even before the government shutdown.

President Trump has a list of five finalists to replace outgoing Fed Chair Jerome Powell. Here's a look at each one.