Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on August 14, 2008

Locking Stance:  LOCKING     Mortgage Bonds: -9bp

Mortgage bonds were trading slightly higher (about 3bp) prior to the release of the CPI data, but they immediately made a drop after the CPI was released.  Yesterday, I posted about how the charts were predicting unfavorable CPI data, and we got it, so check out this post…Mortgage Rates Headed Higher?

As for this morning’s data, overall CPI was double what was expected, coming in at 0.8% versus 0.4%.  On the core level, that is minus volatile food and energy, it was inline with expectations at 0.2%.  The favorable news of the day is that Initial Jobless Claims exceeded expectations a little again this week.

Are there “bright sides” to the data?  Yes.  CPI was lower than last month, and with oil prices coming down, the inflationary expectations may be easing.  Since CPI is last month’s data and Initial Jobless Claims is last week’s, the near term focus should be on lackluster economic growth, which would be good for mortgage bonds, and thus, mortgage rates.

We will have to see how the day plays out as the battle between recession and inflation wages on.

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