What Are Interest Rates Going To Do? 5/14/07

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, May 14, 2007

Presently Market Conditions Are:
The Federal Reserve decided Wednesday to hold short-term interest rates steady at 5.25 percent and gave no indication of intent to move interest rates anytime soon. However on Friday, the Commerce Department released its report citing U.S. retail sales slowed in April dropping an unanticipated 0.2 percent. This report leads to concern that a decline in consumer spending, which accounts for more than two-thirds of the economy, will jeopardize growth. In addition the Labor Department reported producer prices, excluding food and fuel costs, were unchanged for the second consecutive month. These reports have incited a ray of hope that at the next meeting of the FOMC we will see a drop in short-term rates.

My Expectations Are:
Ian Shepherson, chief U.S. economist at High Frequency Economics, predicts that the data released between now and the next FOMC meeting will be "substantially weaker on all fronts." He was quoted by Market Watch as saying, "If we're right, it would be reasonable to expect a serious shift in the Fed's stance at that meeting, followed by the first ease in August." The Fed will meet again June 28th.

As Your Trusted Advisor For Life My Guidance For You Is:
Last week's reports led to little change in mortgage rates. They are still at historical lows. In addition, homeowners and homebuyers this year have turned their interests to more traditional mortgage financing options. We're a nation getting back to basics. What is more fundamental than home ownership? Conditions are ideal. Capitalize on this exceptional season by seeking the assistance of a qualified, professional.