Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on August 19, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  0bp

Well, PPI hit the airwaves moments ago and the markets just don’t know what to do apparently.  One of the things I have talked about is the fact that producer prices hadn’t been increased enough to cover their costs, followed by retailers not being able to do the same, thus inflation would continue even though oil prices have come down.  Today’s numbers show producers jacking prices up finally.

Both overall and core PPI beat expectations in this morning’s report and that will weigh somewhat heavy on mortgage bonds.  In fact, PPI, like the recent PCE report, showed inflation at its highest level since the early 1980s, hardly what Stern’s words showed (he has been trying to calm the markets saying the economy looks like the early 1990s, the period just before a boom).  PPI itself came in at 1.2%, more than double the expectations of 0.5%.  At the core level we see 0.7%, over three times expectations of 0.2%.  PPI at an annual rate is just shy of 10% (came in at 9.8%).

OK, but bonds aren’t moving just yet, sp we have some strength, right?  Well, not likely.  Chances are traders are somewhat shocked and that mortgage bonds will be falling as the news gets digested.  If you haven’t already, get that loan locked.

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