Episode summary
After the jobs report, we may be down to only one rate hike in 2026
HousingWire Daily
· · 24 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that the post-jobs-report bond-market reaction makes sense once you stop assuming falling oil automatically drags mortgage rates lower. He said the market is still reacting to Federal Reserve policy, not just headline inflation, and that the shift in expectations has been dramatic: the year started with talk of two to three rate cuts, but the market has now moved to roughly one rate hike in December for 2026. He also pointed to the 10-year yield around 4.46% to 4.48% as evidence that rates are being held up by policy and labor data, not just energy prices.
On the jobs report, Logan said the headline miss and revisions mattered less than the broader six-month average, which he put at 92,000, still above the Fed’s break-even level. He said unemployment at 4.2% and low jobless claims give policymakers room to stay cautious, even if he thinks some of the Fed’s hawks should soften. He also called out the prime-age labor force participation drop as suspicious and suggested the World Cup may have distorted parts of the labor data.
He linked the housing cycle to recession risk, saying residential construction employment still looks weak but has not yet broken in the way it usually does before a recession. Logan said the conflict’s end and lower oil prices improve the outlook, but the real question now is whether enough Fed members will revise their hawkish stance to change the path for mortgage rates.
Key takeaways
- Logan Mohtashami said the market has shifted from pricing two to three rate cuts in 2026 to about one rate hike in December.
- He said the 10-year yield around 4.46% to 4.48% reflects Fed policy more than the recent drop in oil prices.
- Logan argued the Fed’s six-month jobs average of 92,000 is still above its break-even level, so the labor market has not forced an immediate dovish turn.
- He said residential construction employment is still weakening, but not yet in the kind of sharp break that usually precedes recession.
- Logan said the end of the conflict and lower oil prices should help mortgage rates, but only if more Fed hawks back off.
- He questioned the labor-force data because the prime-age participation drop was unusually large and may have been distorted by the World Cup.
Notable quotes
“the market is now priced in, they never actually priced in three rate hikes um uh for 2026”
“we went from rate cuts to no rate cuts to hikes, and now people are readjusting”
“the prime age labor force data does not fall like that in a monthly report”
“even with this miss 57,000 jobs created instead of over 100 even with the negative revisions to me it's still well above the six-month average”
“residential construction workers don't look good. warehouse construction doesn't look good either”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Moto Shami to talk about the jobs report and how that's impacting mortgage rates. Before we dive in, here are the top five trending stories on housingwire.com.
First up is a story about M&A in the homebuilder space where Clayton Holmes has acquired McGuin Homes. Followed by the GSC's released historical FICO 10T data expanding Vantage Score 4.0. Then we have the article announcing our 2026 women of influence, one of our highest profile awards.
And the article why mortgage rates are rising, not falling with oil under $70. Finally, we have Nexus CEO Mike Cordis launches Evolend Servicing Company. Okay, let's get to today's topic.
Logan, welcome back to the podcast. It is wonderful to be here and I feel like today is a good day for our work that we have done since kind of May to kind of give people kind of a heads up that really the policy shifting is is important for people in mortgage and real estate because if you didn't know what the Federal Reserve was ever doing and you saw oil prices at 67, you saw a jobs report miss on the headlines and have 74,000 negative revisions and then you see the 10-year yield at what level? 4.46 to 4.48, you'd be like, "What the hell is going on here?
But, you know, unfortunately, I think what what's happened is so many people were told that oil prices are going to go lower and soon as they do, the 10-year yield will follow it one to one. And that's kind of not how it operates. It didn't really operate like that when oil prices went up uh right away.
The 10-year yield was kicking and dragging itself higher because policy was different.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- jobs report
- mortgage rates
- fed rate hikes
- credit scoring data
- mortgage servicing
Companies and tickers mentioned
- BRK-B
- BRK-A
- FICO
- Berkshire Hathaway
- Clayton Homes
- McGuinn Homes
- Mungo
- Fair Isaac Corporation
- VantageScore
- NEXA
- evoLend
Watch the episode
Watch “After the jobs report, we may be down to only one rate hike in 2026” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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