The Federal Reserve’s favorite inflation gauge the Personal Consumption Expenditure (PCE) was announced today.  The Core PCE rose 0.1% during May, lower than expectations of 0.2% - which left the closely watched year-over-year Core inflation rate at 2.1%.  This is outside the Fed's desired range of 1 - 2%, but the market rallied in light of the ongoing inflation fears...based on oils rise this week it has to come as a relief to the Fed.  

Also, in the PCE report are readings on Personal Income and Spending, which both grew at rates larger than estimates in May.  The boost in spending was likely due to the stimulus checks that were sent out to many American taxpayers in the beginning of May.   

Oil hit another record high of $142.26 this morning. The inflationary fears inherent in rising oil prices are keeping a lid on both Stocks and Bonds.   Stocks have been downright ugly, checking on CNBC, many stocks are at all time lows,  the Dow is poised for the worst June since the Great Depression.   

The University of Michigan's Consumer Sentiment index fell to 56.4 in June, from 59.6 in May. It's the lowest since 1980 and the third-lowest reading in the 56-year history of the survey.  Mortgage Bonds are being boosted by this poor economic news.  Bonds closed the day up 50 basis points, which means interest rates dropped today. We have had a good two day rally in bonds, let’s hope this continues next week.

If you want to get more involved telling your congress and senate representatives what you think go to www.votesmart.org. If your concerned about issues that are happening today such as high oil and food cost, job concerns or mortgage matter such as losing your home due to your mortgage rates going up to much or because you have lost equity in your home and can’t refi, I encourage you to contact them and ask for their help. Maybe if enough of the silent majority speak up, things will begin to change.

          Mel