Logan Mohtashami on inflation and a possible recession
Feb 12, 2025
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Logan Mohtashami, a leading analyst on inflation and the housing market, shares his insights on the current economic landscape. He discusses the implications of inflation and labor market changes on mortgage rates, particularly after recent banking crises. The conversation highlights challenges in the housing market, including the impact of declining listings and consumer spending on economic stability. Mohtashami also delves into how government job cuts and fluctuating tariffs affect building activity and economic growth.
Current inflation trends suggest a shift towards disinflation, potentially paving the way for lower mortgage rates and a housing market revival.
The housing market's recovery remains challenged by historically low new listings, highlighting the need for balanced mortgage rates to stabilize prices.
Deep dives
Inflation Trends and Federal Reserve Strategy
Current inflation trends indicate a possible shift towards disinflation, with significant insights from various Federal Reserve presidents suggesting potential rate cuts. Recent data, including the CoreLogic single-family rent index, shows the lowest levels in 14 years, pointing to an easing in inflationary pressures. The podcast discusses how adjustments in consumer pricing impact CPI inflation, particularly in the first half of the year. If the labor market remains stable, a scenario with lower mortgage rates becomes more feasible, potentially leading to a revival in the housing market.
Labor Market Dynamics and Government Job Cuts
The potential impact of government job cuts on the labor market is examined, indicating that while there are discussions about increasing labor supply and reducing aggregate demand, such cuts may not significantly affect overall employment. The conversation includes Kevin Hassett's comments on the administration's approach and the historical context of job losses not occurring due to federal worker reductions. The focus remains on the importance of the broader consumer base, which ultimately drives economic activity. The potential for rising jobless claims remains contingent on how these policy changes unfold in practice.
The housing market faces significant challenges, particularly with new listings hovering at historic lows, affecting overall supply and market performance. Despite rising active inventory, the failure to see a rebound in new listings could hinder recovery efforts. The discussion emphasizes the importance of achieving a balance in mortgage rates to stabilize housing prices and sales. As builders navigate increasing construction costs and uncertain demand patterns, maintaining a functional and steady housing market is crucial for economic health.
On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about inflation, a possible recession, new listings and agents of chaos.
The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate stories. Hosted and produced by the HousingWire Content Studio.