Mounting evidence of inflationary pressures last week was met by Today's reports of strong consumer spending. Both supported the gentle if stead increase in mortgage rates that we've witnessed now for the second week in a row. Still uncertainty is in the air, with currency markets betting in favor of a rate cut in January in light of a housing report earlier this week which showed new construction at its lowest level in 16 years. The balance between housing sector weakness with continued evidence of healthy spending and inflationary pressure is a drama that markets and consumers will continue to watch over the coming months.



Published on July 26, 2007