Rate Update June 23, 2008

Weakness in the stock market has helped rates stabilize. The Dow Jones Industrial Average is back below 12,000 as credit related concerns continue. If weakness in the stock market persists we could see mortgage rates benefit.

We don’t expect a lot to change with regard to interest rates until Wednesday when the Fed is scheduled to issue their monetary policy decision. It is widely expected that they will leave rates unchanged but the substance of their statement could move the markets. It is clear that inflationary pressures in the economy are growing and the financial markets will be listening for how they plan to deal with it.

Current Outlook: neutral