EXCLUSIVE: Why This Mortgage Expert Won't Be Fighting The Fed

What else do active traders and investors care about most besides their families and the markets? Sports! 

The listeners of Wednesday’s PreMarket Prep show were treated to insightful commentary on the future course of interest rates as well as the rapidly rising industry of sports wagering, and more specifically daily fantasy sports.  

Rob McLister, the editor of the Canadian investment newsletter MortgageLogic.news and the founder of the daily football fantasy sports site DFSHub.com, was our guest. 

How Long Will Rates Move Higher? McLister, a 15-year veteran of the mortgage industry, said he's not going to fight the Fed. 

“Rates are going to continue going up until inflation has sorted itself out, and that could be at least into Q1 of next year,” he told Benzinga. 

“That is, if you believe the market, and who else do we have to believe besides the futures and related markets?”  

Nobody knows — including the Fed and the Bank of Canada — where rates will be in six months, McLister said. 

His primary concern is that inflation may have not peaked yet, and that upcoming data could be “worrisome” and extend the rate hikes longer into 2023.

The Rate Of Increases: McLister is not anticipating that rates will return to the levels seen in the 1980s. 

Instead, he remains focused on the relative increases in rates that “have not been seen in decades.” 

Along these lines, the rate increases are starting from much lower levels, so the recent doubling of rates “is very impactful on the consumer, as sensitivity to interest rate hikes are two to three times what it was in the 1980s,” he said. 

While McLister said the meaningful impact of rate increases normally takes 12-18 months, he added the lag has become depressed due to a number of factors. The primary one: consumers are more leveraged.  

The current environment does not have the same kind of credit risk in the markets that existed with the 2008 housing bubble, he said. 

The Bloomberg Of Fantasy Sports Data: The daily football sports fantasy is for participants who want more bang for their buck, McLister said. 

As opposed to picking a team for the entire season and making trades, fans can start each week with a “clean slate” and fulfill their needs for immediate gratification, he said. 

Leveling The Playing Field: McLister made the analogy to the professionals that individual investors compete against in the stock market.

“Just like stocks and commodities, the pros dominate. and in order to compete with them, you need to have pro-level data and pro-level news,” he said. 

“DFSHub takes the best data and the best NFL news and puts it all in one place and page and then educates people on what the most important stats to help them pick for more profitable lineups." 

Daily Fantasy Sports Only Getting Bigger: With over 50 million people playing regular fantasy sports, the number also doing daily football fantasy — 15 million — is growing “by leaps and bounds,” McLister said. 

When posed the question of whether a daily fantasy sport is recession-proof, McLister said yes.

“What better way to take your mind off 8.5% inflation than playing daily fantasy sports?” he said. 

“Perhaps instead of placing a $25 wager, one can scale back to only $5. It's a hobby, and everyone always wants to prove they are smarter than someone else, even when interest rates are going up.”

The PreMarket Prep discussion with McLister on these two topics can be found here: