HousingWire Daily Logan Mohtashami on what the Fed is going to do now
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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.
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Fed's Dual Mandate Dilemma
- The Michigan Consumer Sentiment Index showed a vertical move in inflation expectations, creating a dilemma for the Fed.
- They must choose between addressing inflation or prioritizing employment, potentially leading to a policy mistake.
White House vs. Fed on Mortgage Rates
- The White House is focused on lowering mortgage rates to increase housing affordability.
- Despite the Fed's supposed independence, the administration's focus on housing adds another layer of complexity to the situation.
Fed's Influence on Mortgage Rates
- Fed policy significantly influences mortgage rates, holding 65-75% control.
- Despite current restrictive policies, the Fed could lower mortgage rates if they chose to.