Could a government shutdown actually mean lower mortgage rates?

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It’s been a volatile year in the markets, and a government shutdown might bring a new wrinkle. The Trump administration is threatening not just furloughs of federal workers during a shutdown, but rather job layoffs. The threat of permanent job cuts could further weaken the labor market, which was one of the factors contributing to the recent decline in mortgage rates.

For Hepp, it’s just the latest twist that makes her job even more challenging.

“That’s the thing that it’s been so difficult, maybe more so this year, because tariffs haven’t been a story for almost 100 years,” Hepp said. “It was here and there in some sectors, but nothing at this scale. One day it’s on, one day it’s off, one day it’s up, one day it’s down. Even when you’re trying to read into a CPI and trying to understand impacts, how are you supposed to understand it when you don’t even know if that tariff is on or off?”

Reading the data

Hepp said for her and her fellow economists, all they can do is try to take in all the data they have and make their best judgment on where the market is heading.

“You just take the best data or information you have in the moment you say, ‘Okay, as of this moment, this is what I think,’” she said. “This may change tomorrow, but as of this moment … so, yeah, it’s been really difficult. I feel sometimes when I’m asked about mortgage rates, I don’t know what to say.”



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