My friend John Herzog of New South Federal tells me that inflation remains the major question when it comes to the direction interest rates will take for the remainder of 2007. The lowering of short term rates by the FED concerns the long-term mortgage investors that too much stimulation of the economy could cause inflation.

Since the initial FED move downward, inflation numbers have been mixed, with the core rate low but fuel and food causing the actual number to rise. Solution: if we quit eating and driving we can have lower mortgage rates!

This Wednesday the FED will release the CPI Report, which will give us the retail inflation indicator.  It may be the key number this week. 

I will post an update later this week once the CPI is released.  In the meantime, to learn more about Montgomery AL real estate, please call me at 800-HAT-LADY or visit