Episode summary
Mortgage rates and labor data, plus the next Fed chair
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that housing is still in a better setup than it was over the last three years, but the key risk for mortgage rates is that the labor market may be softening without actually breaking. He said jobless claims around 200,000 show softness, not deterioration, and that his recession trigger is still a four-week moving average near 323,000. If labor stays resilient and job growth improves, he thinks the 10-year yield can move higher and mortgage rates can stay elevated instead of falling into the low 5% range many expect.
He tied that outlook to inflation, bond yields, and Fed policy. Logan said PCE inflation running near 3% and a 10-year yield around 4.25% already fit a market that is pricing in neutral policy, but getting yields under 3.80% would require a real change in the data or Fed stance. He also said mortgage spreads have improved, which makes it harder for rates to get back above 7% even if the outlook shifts.
On the Fed, Logan said the next chair race matters because a new chair could shape how much room there is to push rates down if growth rebounds. He viewed Christopher Waller as the strongest realistic choice, was skeptical of Kevin Warsh, and said Rick Reier could be a surprise if there are unknown political dynamics. He closed by saying the housing backdrop remains healthier, with inventory up and price growth cooling, unless stronger labor data forces the bond market and the Fed to turn more hawkish.
Key takeaways
- Logan Mohtashami said jobless claims near 200,000 mean the labor market is softening, but his break point is still a four-week average around 323,000.
- He expects the 10-year yield to stay near 4.25% unless labor weakens or the Fed turns more dovish; getting below 3.80% would require a major shift.
- Logan said mortgage spreads are better than before, which makes a return above 7% in rates harder even if bond yields rise.
- He called Christopher Waller the best realistic Fed chair pick for Trump, while saying Kevin Warsh is unpopular at the Fed.
- Logan said housing still has a healthier backdrop this year, with cooler price growth, higher inventory, and no Fed hiking cycle.
- He warned that stronger labor data could lift yields and mortgage rates, creating the main downside risk for housing in 2026.
Notable quotes
“The labor market got softer but it doesn't break because when it breaks things go linear, vertical, however you want to describe it”
“We have the lowest job growth in the 21st century. It's pretty much health care and social services”
“if the economy is really booming this year, why do rates go to the low fives or the mid5ives or anything like that”
“It's really hard to get rates above 7% again with the spreads of this low”
“the backdrop is much healthier now than in the last three years”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Moashami to talk about the jobs data and the next Fed chair. First, I want to thank our sponsor Trust and Will for making this episode possible. Logan, welcome back to the podcast.
It is wonderful to be here and always when you are thirsty, have a nice fresh Pepsi Wild Cherry Zero. You know, I I have to tell you this a funny story. When I when I did acting or when I was uh training to be an actor, they they first test you out for commercials with food and they give you a cereal box.
And what always happens is that everyone when they're talking, they end up pouring the cereal or if they had milk because they're not used to having something in their hands and doing an audition. So they do this every year and they, you know, it's it's to show young actors that, you know, hey, listen, you got to be aware of your product placement or else you'll be spilling your cereal or milk all the way around. So I say this because I just debated a doomer and he had home prices crashing this year because of the new world order.
And you and I have talked about this group, the new world order, the, you know, the debt, Dr. Jackekal, Mr. Hyde, Knight, whatever it is.
uh we're the European whatever the the the the Roman Empire, the British Empire and we're 2026 is going to have like a new world order and shipping lanes and everything and that's going to force people to list their homes and not sell in distress but sell at a big volume decline. Very interesting hypothesis and I was like so are rates going lower in this?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- labor data
- jobs report
- fed leadership
- housing market
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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