Episode summary
What’s driving rates: the Fed, jobs data or the Iran conflict?
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that the biggest driver of mortgage rates right now is still the labor market, not the Fed’s messaging or the latest conflict headlines. He says mortgage rates above 6.64% have slowed housing demand, with purchase applications down 3% year over year, and he expects the bond market to react most sharply to the jobs report, especially wage growth and any revisions.
He says the Fed’s stance matters, but traders are really watching whether labor data keeps the 10-year yield near yearly highs or gives it room to fall. In his view, wage growth above 3% remains too hot for the Fed, while softer jobs and weaker wage gains would support lower rates. He also points to a more hawkish backdrop from officials like Beth Hammack, Lorie Logan, and Neel Kashkari, who he says are focused on keeping inflation from getting entrenched.
Mohtashami also says the Iran conflict has added uncertainty and volatility, but he does not see it as the only force at work. He notes that oil is not at a crisis level, yet the conflict and the political noise around the Fed are creating an environment where mortgage rates can swing quickly in both directions.
Key takeaways
- Mohtashami says labor data matters more than Fed rhetoric because bond traders react more aggressively to jobs and wage growth.
- He says mortgage rates above 6.64% have become a line in the sand and helped push purchase applications down 3% year over year.
- He argues wage growth is the key number to watch, with sub-3% growth looking much better for rates and the Fed.
- He says the Iran conflict adds uncertainty and can lift yields, but it is one of several moving parts rather than the only driver.
- He believes calmer headlines would help markets, because rapid-fire political and geopolitical news is making rate moves more violent.
Notable quotes
“I personally don't think the 10-year yield and mortgage rates would have gone up to where they are today without the labor data improving”
“I always run off that if the labor market was getting weaker, bond traders have will push yields out and guess what”
“wage growth is key for the Federal Reserve. Non-farm payroll wage growth last month was uh 3 and 1/2%”
“the market is going off other Federal Reserve It is Beth Hammack's Federal Reserve”
“the best case scenario is always the same. If if the jobs number misses estimates and the revisions are negative and wage growth is going lower, that that's that helps rates”
How the episode opens
Welcome everyone. I'm joined today by my podcast partner, lead analyst Logan Mohtashami, to talk about what's driving rates right now. Is it the Fed?
Is it the jobs data? Or is it the conflict? Before we dive in, here are the top five trending stories on housingwire.com.
First is UWM lines up record 2.05 billion Ishbia Oaktree Capital raise as it posts Q2 loss. Followed by our housing market spotlight, what the national median price isn't telling you. Then we have what's what Better CEO swap means for its future.
And Zillow says its housing super app strategy is working. Finally, we have our exclusive coverage on Envoy Mortgage to acquire Mason Mac distributed retail assets. Also, it's earning season, so we have tons of other coverage of second quarter earnings for mortgage, real estate, and home building companies.
Okay, Logan, welcome back to the podcast.
It's jobs Friday. You know, it's been a very interesting week because we're both you and I are here in Orlando, Florida speaking at Vamp and you we always try to give people an understanding how mortgage rates and the 10-year yield and the spreads work and everything and today is another day where you know, the conflict news is Fed chair war secretly talking to Trump and you know, it's jobs the week you know, so there's so many things going on and the reason it matters now is because mortgage rates are above 6.64% and that's kind of been our line in the sand for years now. And we've seen the growth rate in housing slow down because of it purchase application data was was down year-over-year 3%.
So, you know, so what's driving this? Like how does it get worse? How does it to better?
You know, we're going to get a good test case with how the bond market will react to jobs Friday and just kind of remember the last you know, some of the data lines of job openings and ADP are coming in just a little bit under estimates and I always try to tell people the Fed doesn't you know, if we're creating 33,000 more jobs, it's okay.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mortgage rates
- fed rates
- jobs data
- iran conflict
- housing market pricing signals
Companies and tickers mentioned
- UWMC
- Z
- HousingWire
- UWM Holdings
- Oaktree Capital Group
- Better
- Zillow Group
- Envoy Mortgage
- MasonMac
Watch the episode
Watch “What’s driving rates: the Fed, jobs data or the Iran conflict?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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