As we watch the horrific scene unfolding in Ukraine our hearts go out to those fighting for and fleeing their country. Please join me in sending prayers and support to those affected. This geopolitical tension has destabilized markets here and led to investors seeking safer places to put their money, which means moving out of equities and into the bond market.
When this happens it often leads to an improvement in mortgage rates, which is what we saw happen last week. However, then to start this week rates jumped back up in response to the market’s reaction to changes in monetary policy being discussed by the Fed.
It’s fair to say that rates have experienced significant volatility so far in 2022 and with the combination of geopolitical uncertainty and rising inflation, and I imagine this volatility will be with us for the foreseeable future.
As for economic data this week, we will see an important inflation report come out. Consumer prices have been extremely elevated and have been consistently exceeding expectations. January’s 0.6 percent monthly increases for the overall headline beat expectations by 1 tenth for both; February’s consensus a gain of 0.7 percent. Annual rates are seen at 7.9!
Last week’s Jobs Report was very positive, although hardly anyone noticed as the eyes of the world are focused on Ukraine and rightly so. However, I did want to point out that the job market grew by 678,000 new jobs and the unemployment rate dropped more than expected to 3.8 percent.
Also, wage inflation remained flat on the month, which of course will help mortgage rate stabilize. The annual wage inflation rate is 5.1 percent, considerably lower than last month’s 5.7 percent rate.
During his congressional testimony last week Fed Chairman Jerome Powell revealed that he will ask for a .25 percent increase in the Fed Funds Rate as a measure to curb inflation. He expressed that the Fed is moving cautiously, however, as the situation in Ukraine continues to affect markets worldwide.
This is one of those times my friends that we ride the waves of volatility in the markets. This is also the time it benefits you and can save you money when you have a broker like me by your side helping you navigate these waters. So, if you are considering a purchase or would like to access the equity in your home by refinancing, opportunities may arise to grab great rates and I can keep a watch for you. Reach out today and let’s discuss your options! Simply reply to this email or text/call me at 818.307.6072.
