Monday, April 02, 2007

What Are Interest Rates Going To Do? 4/02/07

You like me are asked this question often. "What Do You Think Interest Rates Are Going To Do?" You know, now here is a customer focused report for Mortgage Market Direction.

Week of: Monday, April 02, 2007

Presently Market Conditions Are:
The Fed's dilemma seems to be getting tougher. Core consumer prices increased at the fastest pace in six months during February, even as consumer spending slowed to the weakest in six months, according to government data recently released. The Fed's preferred measure of core inflation -- the core personal consumption price index -- rose 0.3% in February, the biggest gain since August, the Commerce Department reported.

My Expectations Are:
The Fed is thus faced with both accelerating inflation and a slowing economy, a condition that some have called "stagflation." Fed Chairman Ben Bernanke testified last week that the Fed believes the slowing economy will reduce inflationary pressures over time without falling into recession. According to a Bloomberg report, “Traders expect about a 60 percent likelihood the Fed will cut its benchmark rate by a quarter-point to 5 percent in August, according to fed funds futures.” The central bank has left its overnight lending rate at 5.25 percent since August.

As Your Trusted Advisor For Life My Guidance For You Is:
Despite the conflicting message of recent week’s economic indicators, mortgage rates have remained stable and attractive. In this peak spring real estate season those shopping for a new home have the best of all worlds: great choices, low rates and a myriad of mortgage options. To ensure you capitalize on this excellent scenario, always seek assistance from a qualified, professional.

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