Episode summary
The Fed hawks send mortgage rates higher
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that mortgage rates are being driven more by the bond market’s reaction to Fed hawks and geopolitical risk than by the official Fed chair. He said the market is effectively following Cleveland Fed President Beth Hammack, who he described as the most hawkish voice and the one most likely to push for more rate hikes if inflation and labor data stay firm.
He tied the move in the 10-year yield to a “trifecta of bad news” around the Iran conflict, saying missile strikes, tanker incidents, and talk of a possible land blockade all added upward pressure on yields. In his view, the combination of conflict risk and hawkish Fed commentary made Friday a clear example of why long rates can rise even when mortgage spreads help cushion the move.
Mohtashami was sharply skeptical of Kevin Warsh’s task force idea, saying the market and many Fed members do not trust it and may see it as an attempt to massage data toward a dovish case. He said the labor market still looks solid to the hawks, with Beth Hammack treating 4.3% unemployment as full employment, so softer job data would be needed to change the outlook.
Key takeaways
- Logan Mohtashami said the market is treating Beth Hammack, not Kevin Warsh, as the Fed’s real hawkish leader.
- Mohtashami said Friday’s jump in yields reflected both Fed hawkishness and a “trifecta of bad news” tied to the Iran conflict.
- He said mortgage rates were 6.83% and that stronger mortgage spreads are helping keep rates from moving above 7%.
- Mohtashami argued that Warsh’s task force is not trusted by the market and could be seen as an effort to push a dovish agenda.
- He said Hammack views 4.3% unemployment as full employment, so only weaker labor data would likely soften the hawkish case.
Notable quotes
“the bond market is really moving off of the most hawkish person in the Federal Reserve and that's Beth Hammock”
“Friday morning we had a trifecta of bad news on the conflict, right”
“the 10-year yield and mortgage rates thankfully from a mortgage spread today more than anything else”
“I just don't trust this guy”
“my full employment is 4.3%”
How the episode opens
Welcome everyone. I'm joined today by lead analyst Logan Moto Shami to talk about who the market is paying attention to at the Fed and what that means for mortgage rates. Before we dive in, here are the top five trending articles on housingwire.com.
First up is Logan's article, Fed Hawks are on the war path, sending rates higher. Followed by Chris Gallow enters guilty plea in federal mortgage fraud case. Then we have how Compass used technology to chart its course to the top and Ice Post Strongest Quarter for Mortgage Tech since 2022.
Finally, we have Nexa's Mike Cordis criticizes Loan Depot pitches loss to switch companies amid ongoing lawsuit. Lots happening over there. You can read all of that by becoming a subscriber using the code podcast 20 to get a 20% discount.
Okay, Logan, welcome back to the podcast.
Sarah Wheeler, right before we go on air, she make sure to let me ask some questions, you know. So, I I know I can I could go on a rant uh at times, but it is Friday morning and what a day. What a week.
What a week this has been. So, this is going to be more of a generational talk in terms of how to look at the the housing market and the Federal Reserve going out for the rest of this year until someone wants to put their big boy pants on and and do their job and uh how we should think about mortgage rates with the new Fed chairwoman Beth Hammock from the Cleveland Fed. She's running the show.
The bond market's running off of her, so I upgraded her title.
Yeah. So, okay, we had the three Fed hawks come out today um after the FOMC uh statement giving their statements on, you know, why they dissented, why they wanted to raise rates.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed policy hawks
- mortgage rates
- 10-year yield
- mortgage tech earnings
- mortgage lending legal cases
Companies and tickers mentioned
- ICE
- loanDepot
- Compass
- NEXA
- Federal Reserve
Watch the episode
Watch “The Fed hawks send mortgage rates higher” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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