Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on August 29, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -22bp

Today was a day that played out almost exactly as I expected once the numbers were released.  Traders always react to the initial numbers to get a “jump” on profits, but as they look deeper into the numbers, well, reality hits and they sometimes run the other way.

Today’s initial take on PCE was rather tame and couple that with the drop in Personal Income and you would think inflation was in check.  Rather, when looking deeper into the data released, you see that personal income, excluding the drop in “stimulus check income” actually rose.  Add to that the fact that core PCE was higher than expected and we see a continuation of increased costs being passed on to the consumer, aka increased inflation.

Bring into play that Personal Spending didn’t drop below expectations and that adds more inflationary pressures to the mix.  Overall, drops in oil prices couldn’t help take inflationary issues out of the bond pit, nor did the nearly 150 point drop in the DJIA.

What does this all mean?  Well, time will tell for sure, but things may be returning to “status quo.”  If that is the case, mortgage rates will be heading higher yet again.  There are still some good things that can be seen in the charts, so don’t lose all hope yet.  Rather just wait to see how things play out as the week gets started on Tuesday.

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