Florida Mortgage Rates – Morning Report

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

Locking Stance:  LOCKING     Mortgage Bonds:  +9bp

The PCE data just hit the airwaves a moment ago and bonds likely have not fully digested the data, so we can expect more movement as things settle down.

Overall PCE was below expectations, but at the core level it was higher than expected, which discounts the oil price move lower.  As I have mentioned, the earlier increased costs have yet to fully materialize throughout the economy and this is a good indication of that. 

On the other side, Personal Income dropped more than expected.  The caution here is that the government has finally stopped giving out stimulus checks, so we should see another drop next time as well.  While on the surface this report looks good, the underlying data is still somewhat inflationary.

Personal Spending was in line with expectations and that means that while income has dropped (albeit from stimulus checks), spending has not and that is not a good thing.  Personal Savings is again headed toward the negative spectrum if not already there and that should concern all of us.

Today is a shortened trading day as the mortgage bond market will close at 2pm ET.  That means we can expect low volume and high volatility today, and likely next week with the market being closed Monday to celebrate Labor Day.

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