Daily Market Update 5/9/08

Mortgage rates inched lower Friday as stocks tumbled on news of soaring oil prices, which hit a new record high of $126 per barrel. Oil prices have nearly doubled since last summer. The impact of higher oil prices on mortgage markets is yet to be determined. Inflationary pressures have been mounting as a result of higher energy costs in recent months. Higher inflation typically pushes interest rates higher, but the spike in prices at the pump is also likely to slow economic activity, which serves to hold inflation in check, creating a counter-balance. Major economic data to be released next week include Tuesday’s Retail Sales report and Wednesday’s Consumer Price Index, both seen as potential market movers. Industrial Production will come out Thursday, with Housing Starts and Consumer Sentiment rounding out the week on Friday.

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