As the ongoing U.S. government shutdown that commenced on Oct. 1 dragged through its first full month, mortgage rate locks held relatively steady, though October’s overall volumes fell 1.3% from September.

Purchase locks that slipped 2.86% lower were offset by cash-out refinance locks that climbed 7.41% from the previous month, according to new figures published by Mortgage Capital Trading, a capital markets advisory and hedging platform for mortgage lenders.

Andrew Rhodes, head of trading at MCT, said in a press release that despite the Federal Reserve’s cautious stance on a December rate cut, “I think we’re set up for a better winter than we’ve seen in several years.”

Financial markets had already priced the 25-basis-point cut to the federal funds rate that central bank policymakers delivered at their late-October meeting into mortgage spreads, Rhodes added, which helps explain the rise in mortgage rates in response to Fed Chair Jerome Powell’s hawkish tone.

A rate lock is an agreement between a borrower and a lender that the interest rate on a loan will remain fixed during the loan processing period. On an annual basis, lock volumes remained well above last year’s levels in October, though transaction types tell a more nuanced story.

October purchase locks were roughly flat, only 0.14% higher than a year ago, while rate-and-term refinances were 103% higher and cash-out refinances were up nearly 34%.

The government shutdown continues to delay the release of key economic reports that Fed policymakers rely on to set appropriate monetary policy.

In last month’s post-decision press conference, Powell cautioned markets not to bank on inevitable easing in December, citing a labor market that has not exhibited accelerated deterioration and policymakers who are “absolutely committed” to bringing down inflation.

“A further reduction of the policy rate at the December meeting is not a foregone conclusion,” the Fed chair said. “In fact, far from it.”

The consumer price index, a common measure of inflation, rose 3% in September, the fastest pace since January and well above the Federal Reserve’s stated 2% target.

Meanwhile, payroll processing firm ADP reported Wednesday that private employers added about 42,000 jobs in October, the first additions since July.

A number of Fed members have delivered remarks in recent days defending the October rate cut — which produced two formal dissents — but urging caution ahead of any additional easing in December.

Ultimately, the availability of inflation and employment data in the weeks leading up to the Fed’s two-day meeting on Dec. 9 and 10 will determine the outcome of their rate-cut deliberations.

The government funding impasse would have to be breached soon, however, for official data to start flowing into the Fed’s decision-making.

“Even if the government came back online tomorrow, we’d still see a two- to three-week lag before labor data is published,” Rhodes said. “That means the Fed could have to make its December decision without a full picture of the economy.”