Episode summary
Will the next Fed move be a rate hike?
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that the latest jobs report shows labor data improving from a very low base, not booming, but enough to make the Federal Reserve less likely to cut rates. He points to lower jobless claims, stabilizing job openings, and better breadth in recent reports, saying the labor market is now running above the Fed’s implied break-even pace. He also says wage growth at 3.6% remains too hot for the Fed to feel comfortable moving toward 2% inflation.
The bigger risk, in his view, is that elevated oil and gas prices, plus the ongoing Iranian conflict, keep inflation pressures sticky and give hawks cover to resist cuts or even talk about hikes. Logan says higher energy costs can weaken real wages and squeeze lower-income consumers, but he does not see the current backdrop as recessionary without a broader credit contraction.
For housing, Logan says mortgage rates are still being driven mostly by Fed policy and that the year’s range has remained fairly stable because the Fed has not guided higher. He does not expect a rate hike this year as his base case, but he says next year becomes more plausible if inflation and wages keep rising while labor data stays firm.
Key takeaways
- Logan Mohtashami says the jobs market is improving from a very low base, with year-to-date payroll growth around 76,000 and better breadth across sectors.
- He argues the Fed’s implied break-even is far below his own 78,000 estimate, which makes the recent labor data good enough for hawks to resist cuts.
- Logan says 3.6% wage growth is still too high for the Fed to be comfortable getting inflation back to 2%.
- He thinks elevated oil and diesel prices could hurt real wages and consumer spending, especially on the lower-income side.
- Logan’s base case is no rate hike this year, but he says next year becomes more plausible if inflation and wages remain sticky.
- He says mortgage rates should stay in a roughly 5.75% to 6.75% range unless the Fed turns more hawkish or labor data weakens.
Notable quotes
“the jobs data is getting better. And I I'm afraid there's a lot of people who are listening to people who are going to keep on saying the revisions are negative”
“My break-evens are 78,000. You and I have talked about it, said I'm not changing that, cuz I think there's there's missing people looking for work out there”
“it's good enough for them to start debating uh no more cuts, whatever if the war if the conflict keeps going on, should we hike rates next”
“with inflation going up higher, your real wages are less”
“I don't see a rate hike uh this year, but next year if inflation still keeps on going”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Mohtashami to talk about the jobs report and what that means for mortgage rates. Before we dive in, I want to thank our sponsor Total Expert for making this episode possible.
Logan, welcome back to the podcast. It is wonderful to be here. Great to have you on, man.
What what a big day. Jobs Friday did not disappoint. Okay, so before we get into the labor data and inflation in the Fed, I have 203 requests from our listeners on why won't you call me chart daddy?
No, because first of all, first of all, I'm your boss. I'm not chart calling you that. — Oh, wait, wait, wait, wait. What are you DOING RIGHT NOW? OH, YOU'RE USING the finger, you know.
Yes, as as as our producer and I were talking about it, like that would just be creepy if I called you that. No, other people can call you that. I'm never calling you that.
No. Okay, fair enough. Well, they asked, so I I wanted you to respond to all of them.
I do appreciate it though, and I appreciate your love of charts. Okay, well, let's dive into what we saw with the jobs, which what did you think? So, a few months ago, I think it was even late last year, you and I did a podcast where we said, you know, there are a there is a backdrop for things to be better in 2026, right?
You know, the first the first year of the trade war, cuz I I always bring that up cuz I remember the first trade war and you know, when there's tariffs and everything, not a lot of people know what the rules are, and you know, even back in 2018 after the corporate tax cuts, like business investment went to zero, and you know, people just don't know.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed rates
- jobs report
- rate cut outlook
- rate hike expectations
- 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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