This morning brought us the release of the consumer price index, which measures inflation at the consumer level. The numbers show that inflation is moderating as the fed has continually said this year. The overall CPI number came in at a -.1% drop versus estimates of a 0.0% reading and the core which strips out volatile food and energy came in right at expectations of a .2% increase. This brings the year over year numbers down from 5.4 to 5.2%. There is a good chance that these numbers will help decrease any resistence that are keeping rates from dropping. Inflation is the mortal enemey of mortgage rates and it appears that inflation will continue to moderate as oil is down, again, almost $5 a barrel to $91.

Today the feds will announce their decision on the overnight fed fund rate. Over the last couple days, the futures market is predicting a .25% cut. When the fed does cut the overnight rate, mortgage rates do not drop at the same rate. More important then the actual rate cut or rate hike is the wording of the statement. We will review the statement once it is released and let you know how it may affect mortgage rates.

All in all, today is a good day for mortgage rates even though they are still relatively the same as they have been for the last week. Inflation appears to be under control and more then likely will continue to fall. Floating seems like a safe call but with our financial system in turmoil they could turn on a dime with one big headline tape bomb. You can take all risk out of the equation by locking now, but if you have the stomache, floating could pay off but you need to measure your risk tolerance. As always, stayed tune to our blog and we can let you know if rates are worsening ahead of time to allow you to get your loan locked.

For a much more in depth analysis of todays events, click the professional blog at the top of the page. We try to keep the consumer blog as easy to understand as the average consumer only deals with a mortgage every 4 to 6 years. If you are a professional in this business, you will gather a ton of knowledge visiting the professional blog.