Episode summary
How we might avoid rate hikes this year
HousingWire Daily
· · 22 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues the odds of additional Fed tightening this year have improved because the biggest inflation shock from oil and the Middle East conflict has eased. He says the market had already priced in a lot of bad news when the 10-year yield pushed above 4.60%, and with oil back down around the high 60s, headline inflation should cool further.
The key shift, in his view, is that the labor market has not broken. Logan says job growth and jobless claims have stayed better than the Fed’s break-even level, which means the old “labor over inflation” argument still matters but no longer points to a weakening economy. He notes that recent Fed comments sounded less aggressive than earlier market fears, with one hawkish governor saying only one hike is priced in for 2026 rather than multiple hikes.
For mortgage rates, Logan frames the rest of the year as a range-bound story: spreads have already absorbed much of the risk, and the main danger would be a renewed pickup in wage growth or a reacceleration in the economy. Without that, he thinks the worst case for rates is likely behind the market.
Key takeaways
- Logan Mohtashami says the market had already priced in a lot of hawkish risk when the 10-year yield moved above 4.60%.
- He thinks lower oil prices after the conflict ease the case for additional Fed hikes and should help headline inflation cool.
- Logan says the labor market is still above the Fed’s break-even level, so the Fed has less reason to worry about a sharp slowdown.
- He argues mortgage rates are more likely to stay in a range than break materially higher unless wage growth reaccelerates.
- Logan says one hawkish Fed governor now sees only one rate hike priced in for 2026, not multiple hikes.
Notable quotes
“I have one rate hike priced in for 2020 uh6”
“the labor over inflation is still 100% here, but the data got better”
“the worst is probably over on the rate side”
“If wage growth starts to wage growth starts to accelerate, you might get some more hawkish Fed talk”
“The spreads are the story of the year, right”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Modosami to talk about the Fed and how we could avoid rate hikes this year. First, I want to recap the top five trending stories on housingwire.com.
Up first is housing demand holds steady as regional inventory trends reshape the market. Followed by mommy winds rate freeze for stabilized NYC apartments and our coverage on Fanny May expanding its title pilot program. Logan's article why we can't get more housing construction in the US continues to trend high along with an interview with BLK Financials Michael Merritt on the road to housing acts impact on home buyers.
Okay, let's dive into today's topic. Logan, welcome back to the podcast.
It is wonderful to be here. I'm hoping that this is the first weekend that Well, I don't just really don't need to like check what's going on in the news, you know. — Would that be nice? Like your oil that you don't have to look at oil stuff all all weekend?
Just, you know, we don't need to like missiles and drones and this and that and you know, because we said weekends are for war, right? You know, nothing happens during the market. It's so amazing how everyone respects the market hours, but as soon as Friday comes and the markets are closed, all hell just breaks loose with all these headlines and stuff.
So hopefully we have moved on. Um, you know, one of the things I do on Instagram is kind of show people these uh u maritime charts or or ships and and and data to show how much oil is starting to come out. So small steps.
We're we're we're moving uh uh at least in the right direction. So hopefully that's gone.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- avoiding rate hikes
- mortgage rates
- housing market inventory
- fannie mae programs
- housing affordability
Companies and tickers mentioned
- FNMA
- PHM
- BOKF
- Fannie Mae
- PulteGroup
- BOK Financial
Watch the episode
Watch “How we might avoid rate hikes this year” 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.
