Daily Market Update 7/1/08

Mortgage rates were mostly unchanged Tuesday ahead of a potentially big day Thursday. In addition to the release of the Employment Report, a key measures of economic activity, the European Central Bank (ECB) is expected to boost rates by 1/4% Thursday. If they follow through as hinted by ECB President Jean-Claude Trichet, the Federal Reserve may be forced to raise rates sooner rather than later to avoid further erosion in the value of the dollar and continued escalation of oil and other commodity prices. The Fed has been doing a tough juggling act lately, attempting to balance the competing interests of a weak economy with rising inflationary pressures.

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