Weekly Rate Update - 3/13/2006

Another down week for the bond market caused about a 1/8% increase in mortgage rates last week in the Atlanta Mortgage Market. This was mainly due to additional fallout from the news the previous week that the European Central Bank was planning a series of rate hikes. Again, this makes European bonds more enticing to foreign investors and leads to an eroding of bond prices here in the US.

There is a busy economic calendar this week. Investors will continue to watch the inflation numbers very closely. Inflation is a key indicator for the Federal Reserve, and if we continue to see inflationary trends such as last week's hourly wage increase, the Fed may be swayed to extend their rate hikes beyond the next planned hike later this month. Probably the key release this week will be the Core Consumer Price Index (CPI) which will be out on Thursday morning.

If you are looking at locking a rate toward the second half of the week, you might consider getting it locked in before the close of business on Wednesday.