Episode summary
The economic wild cards that could lower mortgage rates
HousingWire Daily
· · 22 min · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that the key mortgage-rate story for the rest of 2026 is not just inflation, but whether the economy weakens enough to trigger a flight to safety. He says the recent hot inflation print matters, but the 10-year yield already moved below 4%, and further downside in mortgage rates would likely require a market event such as a stock selloff, weaker private credit, or a broader growth scare.
He frames 3.80% on the 10-year yield as the important line for a lower-rate breakout, with mortgage rates around 5.75% as his practical threshold. At the same time, he says a stronger-than-expected economy could push rates higher: if labor data improves, wage growth firms, and inflation stays sticky, the 10-year could move toward 4.40% to 4.60% and mortgage rates toward 6.12% to 6.75%.
On policy, Logan says a more dovish Fed under Kevin Worsh would not automatically mean lower rates, because the bond market would still lead. He also says the White House appears focused on lower rates, lower energy prices, and a weaker dollar, but the biggest upside-rate risk remains an economy that outperforms expectations.
Key takeaways
- Logan Mohtashami says the strongest case for lower mortgage rates is a risk-off move in markets, not inflation data alone.
- He puts 3.80% on the 10-year yield and about 5.75% mortgage rates as key lower-rate thresholds.
- Mohtashami says the biggest upside-rate risk is an economy that outperforms, with sticky inflation and better labor data.
- He argues that even if Kevin Worsh becomes Fed chair, the bond market would still move first and the Fed would follow.
- Mohtashami says Trump’s policy mix of tariffs and tax cuts could cut either way, but the current market sentiment favors lower rates more than higher ones.
Notable quotes
“Labor over inflation”
“what are the wild cards now? Now that we're going into March, right? Here it is”
“my line in the sand is 5.75% 380 on the 10ear yield”
“the bond market's going to get ahead of the Federal Reserve, and then the Federal Reserve has to come after”
“the wild card is always the US economy outperforming expectations”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Motoshami to talk about the economic wild cards that could drive mortgage rates lower this spring. Before we dive in, I want to thank our sponsor, Trust and Will, for making this episode possible. Logan, welcome back to the podcast. Madame President, paper rock scissors.
Labor over inflation.
Labor over inflation. And you know it it this is Friday morning and you know Thursday morning I was always I always joke around when the 10-year-old gets around 4% and I was playing the video of Captain America holding Thanos's hand from coming down. And I'm like I'm trying to protect the 4% 10-year reel which I'm really about to say it's it's on the verge of breaking.
But it's Friday morning and we had a really hot inflation print, like super hot inflation print. And it's going to be so hot that the PCE inflation data is going to have three or 3.1% year-over-year. And that's what the Fed really revolves around, you know, the goods pricings of PC inflation more than the true inflation data that a lot of people are talking about that are showing inflation around with a one handle.
But 10-year yield had already broken under 4% and just went up a smidge right after the report and it came back down. So I think the question is now going out for the rest of this year. Obviously this isn't like 2024 where the Fed cut rates and rates just shot back up.
So obviously by now with mortgage spreads and everything, people we we don't have to worry about, you know, rates shooting up to 7% or something like that unless something crazy happens. But like what are the wild cards now? Now that we're going into March, right?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- economic wild cards
- interest rates
- spring outlook
- housing market
Watch the episode
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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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