Rate Update June 26, 2008

Some mortgage programs saw improvements to rates this morning.

As expected the Fed kept rates unchanged yesterday afternoon. Watch today’s you tube video to better understand what they said and how it may impact mortgage rates.

Attention will now be focused on tomorrow’s Personal Consumption Expenditure (PCE) report. This report includes the Fed’s favorite gauge of inflation.

Current Outlook: neutral with a floating bias

What is Personal Consumption Expenditure (PCE)?

The Core PCE excludes the volatile food and energy components from a measure of price changes in consumer goods and services. It consists of the actual and imputed expenditures of households and includes data pertaining to durables, non-durables, and services. It is essentially a measure of goods and services targeted towards individuals and consumed by individuals. This report is the Fed's favorite gauge on inflation.