Daily Market Update 4/25/08

Mortgage rates inched higher Friday as investors await next week’s meeting of the Federal Open Market Committee. Economists are forecasting an 80% chance of 1/4% reduction in the Fed Funds Rate and a 20% chance of no change. Ironically, the majority of consumers might be better off if the Fed holds rates steady, turning their focus instead to inflation. Rising food and energy prices have had a profound impact on many Americans in recent months. Aggressive rate cuts by the Fed have contributed to these higher costs by weakening the US Dollar. The first round of economic stimulus package checks begin going out Monday, further fueling inflationary concerns. Meanwhile, the Dollar strengthened this week against the Euro on signs the worst of the credit crisis may be over in the US, while European economies have been struggling.

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