Episode summary
Fed day preview: The hawks have already won
HousingWire Daily
· · 21 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami says the Fed hawks have already won because bond markets have largely priced in tighter policy without the Fed having to raise rates again. He points to the 10-year yield near 4.60, the softer labor data, and the recent move in inflation prints as evidence that the market has already done much of the Fed’s work. In his view, the bigger risk is not an immediate hike but a more hawkish message from the Fed that keeps mortgage and Treasury yields elevated.
He also argues that President Trump’s push for lower rates has limited traction because he does not have the votes on the Fed board. Logan says Kevin Worsh may be able to influence the tone, but not enough to reverse the broader setup. Even with oil and conflict headlines moving around, he says those factors have mostly reinforced hawkish sentiment rather than forcing a policy change.
The best-case scenario, Logan says, would be a Fed statement that acknowledges the labor market may be softer than it looks and that core durable goods inflation is still easing. That could help bond yields drift lower. But his baseline is that the Fed stays on hold, with markets already having priced in most of the hawkish outcome.
Key takeaways
- Logan Mohtashami says the 10-year yield near 4.60 shows the bond market has already priced in most of the Fed’s hawkish stance.
- He argues the Fed does not need to hike because tighter financial conditions and softer labor data have done much of the work.
- Logan says Trump lacks the votes to force a major pivot, even with Kevin Worsh in the conversation.
- He sees the best outcome as a Fed nod to weaker labor data and easing core durable goods inflation.
- Logan says conflict and oil-price headlines have reinforced hawkishness, but they are not the main driver unless labor data reaccelerates.
Notable quotes
“the Fed hawks have already won”
“the bond market does a lot of the heavy lifting for the Fed always because the bond market tends to get ahead”
“They have what they want”
“The 10-year yield has never breached under 4% unless there's an economic or labor growth scare”
How the episode opens
Welcome everyone. I'm joined today by lead analyst Logan Motoshami to give a Fed day preview. Before we dive in, here are the top five trending articles on housingwire.com.
First, we have Logan's article on today's topic, the Fed hawks are winning even without a rate hike. Followed by DFW's next suburban growth wave is forming west of Fort Worth. Then we have New York City post notice of new tax on second homes and mortgage servicesers face higher costs from transfers and regulation.
Finally, we have mortgage rates move closer to 7% but housing demand holds up ahead of Fed meeting. All right, let's get to it. Logan, welcome back to the podcast.
It is wonderful to be here. It's Tuesday morning, a day before the Fed, so this is going to be a Fed preview. But let's talk about the action today.
Um, 10-year yield actually broke a smidge under 460. Remember 460 was the peak forecast for 2026. And what we've seen in the last few months is that when the conflict gets really hectic, when the news gets really bad and everything, the 10-year yield on Iranian conflict 1.0 got to 468 and then we made that deal, bond yields go down, conflict 2.0, all the hectic stuff, we got to 4.71.
Talk of a deal, ceasefire, whatever this is, 10-year yield has come back down. Um, and just reemphasizing our point that we've made in the podcast and the articles, it's really harder to get the 10-year yield much higher than where we are today, unless the conflict news is really bad or the Federal Reserve gets more hawkish than what they're talking about today. So, today is a Fed preview.
By the time you all see this, it's Wednesday morning. We'll uh uh take a look.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed day preview
- federal reserve rate outlook
- mortgage rates
- housing demand
- rate hike expectations
Watch the episode
Watch “Fed day preview: The hawks have already won” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from HousingWire Daily
-
Has housing demand already changed with lower rates? -
How midterms and jobs week will affect rates -
Preparing for Q1 growth in reverse mortgages -
A clear pathway to sub-7% mortgage rates for Thanksgiving? -
Mortgage rates, inflation and those homeowner vacancy numbers -
What did the Fed meeting mean for mortgage rates?
HousingWire Daily, this episode and its artwork belong to HousingWire. Octagon is not affiliated with the show; this page is an independent summary.
