Episode summary
How low can mortgage rates go with tariff ruling and Kevin Warsh as Fed Chair?
HousingWire Daily
· · 22 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that the Supreme Court’s ruling against Trump’s tariff approach matters for mortgage rates mainly because it removes the threat of “Godzilla tariffs,” but it does not by itself change his 2026 rate outlook. He said the bigger drivers remain the labor market and Federal Reserve policy, and he expects the bond market’s reaction to stay modest unless those variables shift.
He said mortgage rates are still hard to push materially below 5.75% under neutral policy. In his framework, rates could get to about 5.74% if mortgage spreads fall to 1.60, and to roughly 5.375% only if the 10-year yield drops to around 3.80% with very low spreads. He added that truly lower rates would require a weaker labor market and a more dovish Fed, not just tariff relief or a new Fed chair.
Mohtashami also said GDP’s miss was less important than the more stable final domestic sales measure, and he treated the latest PCE inflation reading of 2.9% as consistent with the Fed’s target framework. On housing, he said new home sales remain at multi-year highs near 2019 levels, but builders still are not ramping up enough to change the broader cycle.
Key takeaways
- Mohtashami said the tariff ruling removes unilateral “Godzilla tariffs,” but he does not expect it to materially alter his mortgage-rate forecast.
- He said mortgage rates are still near neutral policy and are unlikely to fall far below 5.75% without a weaker labor market or a more dovish Fed.
- Mohtashami said a new Fed chair or online rate-cut predictions do not matter as much as actual Fed policy and jobless-claims trends.
- He said the latest GDP miss was less meaningful than stable final domestic sales, which he said is what the Fed watches most closely.
- He said new home sales remain near multi-year highs, but builders are still not pushing supply hard enough to change the cycle.
Notable quotes
“the Godzilla tariffs now are off the grid, right? There's no there's no more unilateral Godzilla tariffs”
“I always subjectively say it's the labor market and Fed policy that runs the show”
“It's really hard to get mortgage rates under 5.75 with neutral policy”
“every year that goes by you're closer to death, right? You're not immortal”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Modos Shami to talk about what the Supreme Court's tariff ruling could mean for mortgage rates and what other factors could bring rates down. Before we begin, I want to thank our sponsor, Trust and Will, for making this episode possible.
Logan, welcome back to the podcast. What a Friday morning. You know, you know, Sarah, I'm just glad to be here because going to Utah, you know, our our plane had to like ride up right at the last second because it couldn't land.
And then landing in John Wayne Airport, the tire kind of broke off. And next thing I know, I'm looking out the window, there's like two fire engine, five ambulances, and I was like, uh, they didn't give us a heads up that what was about to happen and they had to tow us in. So, I'm like, "Okay, I've had my once in a-lifetime plane drama.
Hopefully, that never happens again."
Especially on one trip to have all that plane drama. I'm just glad you're back. Um, okay.
Well, as you said, crazy Friday morning. We knew that today was a day that the Supreme Court might um release some of its rulings. Didn't know which ones.
Came in and said that um they found that what Trump did, the way that he imposed tariffs was illegal by saying that it was a national emergency. Um, so that's huge news on top of some other, you know, economic news we got at the top of the, you know, at the beginning of the day. So, let's take the tariffs first because I think that's just, you know, such a huge topic.
Um, what do what is your take on on what this means for mortgage rates, for the economy?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- tariff ruling
- supreme court
- fed rates
- housing market
Watch the episode
Watch “How low can mortgage rates go with tariff ruling and Kevin Warsh as Fed Chair?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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