HousingWire Daily Are Fed rate cuts already priced in to mortgage rates?
35 snips
Sep 16, 2025 
Logan Mohtashami, a lead analyst specializing in housing market economics, joins to share insights on the recent drop in mortgage rates, now at a yearly low of 6.25%. He discusses the economic indicators influencing these trends, including labor data and the construction industry's health. The conversation touches on the potential impacts of Federal Reserve policies and the challenges in reviving U.S. manufacturing. Humor and strategic debate tactics shed light on the complex housing market dynamics, all while navigating controversies surrounding Fed decisions.
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Why Mortgage Rates Dropped
- Mortgage rates fell to a yearly low (around 6.25%) because the 10-year Treasury yield dipped after weak manufacturing data.
- Logan links mortgage rate moves closely to 10-year yield shifts and mortgage spread behavior.
Fed Policy Dominates Mortgage Direction
- About 65–75% of mortgage-rate direction is tied to Fed policy according to Logan.
- He argues the current Fed stance is 'modestly restrictive' and dictates much of the bond and mortgage market action.
Fed Aims For Neutral Not Accommodation
- Logan says the Fed focuses on how fast to reach neutral rather than on reverting to accommodative policy.
- That framing keeps markets in a 'modestly restrictive' expectation and limits cheaper mortgage outcomes.