HousingWire Daily
Logan Mohtashami on what the Fed is going to do now
Mar 17, 2025
Logan Mohtashami, a lead analyst renowned for his insights on the economy and Federal Reserve, joins to unravel looming uncertainties. He discusses the Fed's critical decisions impacting housing affordability and mortgage rates, while linking them to inflation and employment dynamics. Mohtashami draws parallels to the stagflation era of the 1970s, cautioning about recession risks. He elaborates on how tariff-induced inflation complicates policy-making, and the balancing act the Fed must perform between curbing inflation and fostering labor market stability.
25:14
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Quick takeaways
- Current economic uncertainty and rising inflation expectations challenge the Fed's dual mandate of managing inflation while supporting employment.
- The administration’s focus on improving housing affordability suggests a reliance on the Fed's influence over mortgage rates despite economic instability.
Deep dives
Economic Uncertainty and Fed Policy Decisions
Current economic uncertainty plays a crucial role in shaping Federal Reserve policy decisions. The recent Michigan Consumer Sentiment Index revealed significantly increased inflation expectations, prompting discussions on whether the Fed should raise interest rates to counteract this trend. However, the Fed must also consider collapsing employment data, which complicates its dual mandate of managing inflation and supporting employment. The potential for policy mistakes is heightened in this chaotic environment, as reacting too aggressively to specific data points could lead to further economic instability.
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