Well, well. It looks as if the markets aren’t really sure about the Fed after all. Mortgage bonds have stabilized and while not recovering most of last week’s losses they seem to have found a comfort zone at present.

The Dow plunged today by more thanStocks Real Estate 200 points and is well off highs reached last week when the Dow was getting closer to the 18,000 ceiling. At the same time, the S&P went south today and hit lows for the entire year. For investors heavy into equities it’s been a real see-saw battle for the past several months. On the other hand, real estate investors have seen gains beyond the monthly cash flow. Real estate investments are secured by the property.

Still, Federal Reserve President John Williams said just this last Tuesday that there is a “very strong case”* for the Fed to raise the Fed Funds rate next month at its December 15-16 round of FOMC meetings, the last of 2015. The Fed Funds rate hasn’t been raised for almost a decade and has been hovering around an effective rate of zero for several years. However, recent data on first time unemployment claims. Weekly jobless filings hit 276,000 for the week, matching the previous week’s count. That’s more than a half-million in just two weeks and at some point it should begin to affect the non-farm payroll numbers as well as the unemployment rate.

If the unemployment rate for November or December reverses course and begins to climb, some investors will look for a major correction on Wall Street which will then provide a boost to mortgage bonds and Treasuries. On the retail financing front, don’t expect long term rates to fall by very much if this holds true, but what it would do is keep rates in check well into 2016.

*Paul Davidson, USA Today, November 11, 2015