What Jerome Powell & the Fed Said in December 2025 — And What It Means for Rates

On December 10, 2025, the Federal Reserve announced it would lower the federal funds rate by 0.25% — marking the third straight rate cut this year — as policymakers continue to navigate a slowing job market and persistent inflation. (AP News)

Why the Rate Cut?

Fed Chair Jerome Powell explained that recent economic data suggests growth is moderating, particularly in employment. While headline statistics showed modest job gains, Powell noted the Fed’s own analysis indicates U.S. job creation could be significantly overstated in official reports — perhaps by as much as 60,000 jobs per month — meaning the economy might actually be losing jobs rather than adding them. (The Wall Street Journal)

This concern about overstated jobs numbers stems from limitations in the way labor data is measured, especially the birth–death model used by the Bureau of Labor Statistics. If the true pace of hiring is weaker than it appears, that signals the labor market is much softer than the headline figures suggest, increasing the risk of economic weakness. (The Wall Street Journal)

Powell stressed these labor market risks as a key part of the Fed’s decision-making, noting that inflation remains above the Fed’s long-term 2% target even as employment indicators weaken. (Barron’s)

What Powell Said About Future Rate Cuts

While the December cut reflects growing caution, Powell’s comments made it clear that future rate moves are not automatic. The Federal Open Market Committee (FOMC) indicated in its projections that it expects only one more rate cut in 2026, and many officials warned they may pause further cuts unless data clearly supports more easing. (Reuters)

In other words:

• The Fed cut by 0.25% in December 2025 to support the economy.
• Officials see continuing inflation pressures and labor uncertainties.
• The door is open to additional cuts in 2026, but only if the weakening job market and inflation trends continue.

This approach reflects a balance: policymakers want to avoid overtightening and stalling growth, while still keeping inflation under control.

2026 Mortgage Loan Limits — What Buyers & Borrowers Should Know

As 2026 begins, homebuyers and homeowners will see updated maximum loan amounts for major mortgage programs. These limits determine the largest loan size that qualifies for government or agency backing — which usually means better interest rates and lending terms.

2026 Conforming (Conventional) Loan Limits

According to the Federal Housing Finance Agency (FHFA):

• One-unit (single-family): $832,750
• Two-unit: $1,066,250
• Three-unit: $1,288,800
• Four-unit: $1,601,750
• High-cost area ceiling for one unit: $1,249,125
  These limits increase the baseline from 2025, reflecting continued home price growth nationwide. (FHFA.gov)

2026 FHA Loan Limits

FHA limits are typically set as a percentage of the conventional baseline, with minimum (floor) and maximum (ceiling) possible limits based on local home prices:

• FHA floor nationwide (1-unit): about $541,288
• FHA ceiling (1-unit): up to $1,249,125 in high-cost areas
  Limits vary by county and range upward for multi-unit properties. (Nationwide Home Loans)

2026 VA Loan Limits

For most veterans with full entitlement, VA loans have no statutory cap, meaning eligible borrowers can often finance the full value of a home with minimal down payment. For borrowers with remaining entitlement, the conventional conforming limit may function as a guideline. (Homebuyer)

About Bruce Singer — Senior Loan Officer

If you’re planning to buy or refinance in 2026, here’s who to contact:

Bruce Singer
Senior Loan Officer — Vision Home Mortgage
NMLS# 197960 | Vision Home Mortgage NMLS# 357565
Cell: 702-217-5525

Bruce can help you understand how the Fed’s rate outlook and new loan limits impact your home financing strategy — whether you’re a first-time buyer, moving up, refinancing, or investing in property.