HousingWire Daily Preview of a very unusual Fed week
Oct 27, 2025
Logan Mohtashami, a lead analyst in housing and mortgage markets, shares insights on upcoming Fed policy amidst a government shutdown. He discusses market expectations for rate cuts and their limited effect on mortgage rates. Logan delves into the Fed's internal debates and the necessity for a softer labor market, while also analyzing CPI trends and shelter inflation. Finally, he offers an optimistic outlook for the 2025 housing market, highlighting trends in existing home sales and the rise of adjustable-rate mortgages.
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Market Prices Labor Over Inflation
- Markets have largely priced in rate cuts because the bond market favors labor weakness over rising CPI.
- The Fed may still act cautiously and weigh labor deterioration against 3% CPI before easing policy.
Focus On Powell’s Language Not Just Cuts
- Watch Jerome Powell's press conference for key signaling rather than assuming cuts will move mortgage rates much.
- Treat the Fed's language on 'modestly restrictive' policy as the main market driver this week.
Shelter Dragged CPI Down
- CPI showed 3% inflation driven by goods while shelter inflation weakened sharply.
- Logan suggests the shelter disinflation may reflect measurement lag and policy-driven rental supply changes.