I Walked on Fire!

Have you ever done something that you thought was absolutely impossible for you to do? I mean something that in your wildest dreams you never imagined yourself doing? Riding a motorcycle? Skydiving? Running a marathon? You fill in the blanks. What would it feel like after you did the very thing you thought impossible? Would you feel accomplishment? Relief? Excitement? This past weekend I had the opportunity to feel all three.

I found myself standing barefoot at the end of a 12 foot bed of 1,200 degree burning hot coals! I had just done something I never thought I would do. Yep, I walked right through it – completely unscathed.
IT. WAS. AWESOME!

Why do I tell you this story? Well, number one is because it is fun to tell! However, the main reason is because I think too often, we allow our self-imposed limitations to keep us from doing amazing things. I know I do it to myself. “I’ll never get that deal." "I’ll never succeed like him." "I’ll never achieve that much...” I'm sure you have heard similar statements in your own thoughts. None of us have supernatural powers, but I also believe, when we set our minds to it, we are all more powerful than we give ourselves credit for. That was definitely proven to me last week.

So this week, when YOU hear the voices of doubt and fear, let me encourage you to set your mind, take the first step, then keep moving forward. You will experience some amazing things too.

The Week Ahead
The most significant economic report next week will be the Retail Sales data on Thursday. Retail Sales account for about 70% of economic activity. Before that, the JOLTS report, measuring job openings and labor turnover, will come out on Tuesday. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Friday. Import Prices and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. Changes in the situation in Ukraine also could have an impact on mortgage rates.

The Week That Was
It was a volatile week in mortgage markets. Early in the week, rapidly changing conditions in Ukraine caused a great deal of movement in mortgage rates, but there was little net impact. Later in the week, stronger than expected labor market data was negative for mortgage rates, and rates ended the week higher.

Against a consensus forecast of 140K, the economy added 175K jobs in February, and the figures for the prior two months were revised a little higher. This took place, according to the Bureau of Labor Statistics, despite the largest weather related disruption since 1996. The Unemployment Rate unexpectedly rose from 6.6% to 6.7%, but this was due to an increase in the number of people that entered the labor force. The solid jobs report exceeded expectations nearly across the board. Since stronger economic growth raises future inflationary pressures, this was unfavorable news for mortgage rates.

After Russia moved troops into Ukraine, the threat of an escalating conflict caused a "flight to safety" in financial markets on Monday. This involved a shift by investors to relatively safer assets, resulting in a large decline in stocks and significant improvement in bonds, including mortgage-backed securities (MBS). A complete reversal took place on Tuesday, however, after the Russian President said that Russia would not use military force in Ukraine.