Daily Market Update 6/10/08

Rates continued trending higher Tuesday following last night's speech by Fed Chairman Ben Bernanke indicating policy makers will "strongly resist" any surge in inflation expectations. Bernanke also stated he believes the risk of substantial economic downturn has diminished in the past month. Mortgage rates have now risen by about 5/8% over the past three weeks reflecting growing inflationary concerns by investors. Many forecasters expect the central bank to begin raising rates in coming months in spite of generally weak economic conditions. Oil prices remained near record levels, the dollar was higher.

Daily Market Update 6/09/08

Rates moved higher Monday as stocks rebounded somewhat from a huge selloff Friday. Pending Home Sales showed a surprising 6.3% increase in April to their highest level since October. Some analysts are citing the report as evidence the real estate market may finally be bottoming out. Key economic reports this week include Thursday's release of Retail Sales data and Friday's release of the Consumer Price Index (CPI) for May.

Daily Market Update 6/6/08

Mortgage rates moved modestly lower Friday following the Employment Report for May showing a net loss of 49,000 jobs, and a surprising 1/2% jump in the unemployment rate to 5.5%. Rates inched higher for the week on the heals of Fed Chairman Bernanke's comments reflecting concern over rising inflation. Further rate cuts by the Fed now appear unlikely. The dollar fell sharply against most foreign currencies over the past two days causing a spike in oil prices from $122 to $134 a barrel, adding further upward pressure on rates. Next week will be a quiet week for economic reports with the exception of Thursday's release of Retail Sales figures for May.

Daily Market Update 6/5/08

Rates moved higher for a second day following Fed Chairman Ben Bernanke's comments yesterday emphasizing significant inflation concerns. Bernanke clearly indicated the central bank's focus has turned to fighting inflation and shoring up the weak US Dollar. Separately, weekly jobless claims came in at 357,000, better than the consensus of 370,000. The economy continues to show signs of remarkable resilience in spite of the depressed housing market and credit crunch.

Daily Market Update 6/4/08

Rates remained steady Wednesday as first quarter Productivity was revised higher, to 2.6% from 2.2%. Growth in productivity helps keep inflation in check by allowing companies to offset higher costs through greater efficiency. Oil prices continued their slide to around $123 a barrel, down from a peak of $135 last month. US consumers have abruptly changed their car buying patterns in the wake of higher gas prices, shunning trucks and SUV's in favor of smaller, more fuel efficient automobiles. Attention now turns to Friday's release of the Employment Report for May.

Daily Market Update 6/3/08

Mortgage rates remained little changed Tuesday after showing some improvement late Monday. Federal Reserve Chairman Ben Bernanke implied the central bank is unlikely to reduce interest rates further due to mounting inflationary pressures resulting from a weak US Dollar and rising commodity prices. In his first speech on the economic outlook in two months, Bernanke said the Fed is working with the Treasury to "monitor developments in foreign exchange markets" and is aware of the effect of the Dollar's decline on inflation. Analysts believe his remarks provide further evidence the Fed has shifted its focus from economic stimulus to price stability.

Daily Market Update 6/2/08

Mortgage rates were little changed Monday on news that April Construction Spending fell less than expected and the ISM Index, a key measure of the manufacturing sector, came in at 49.6 for May, up from 48.6 the previous month. While a reading below 50 indicates contraction in manufacturing, the increase was not expected. In other economic news, oil prices dropped below $126 a barrel and the Dollar was higher against the Euro. The main event for the week will be Friday's Employment Report. Early estimates are for a net loss of 50,000 jobs in May.