The economy took one step closer towards a recession on Tuesday. The latest economic news released over the past month indicates that the U.S. economy is struggling. The December jobs report showed that employment growth has slowed down significantly, retail spending is lagging, home sales have dropped sharply and the stock market is down over 10% from its 2007 highs. Adding this all up it is a sure sign that the U.S. economy is headed into a recession of some magnitude.

The underlying benefit is that you will probably see mortgage rates continue to decline. The federal reserve has already been forced to lower the fed funds rate to 4.25 and some economists believe they will need to further reduce this another 1.5% in order to help spur economic growth. Keep a close eye on where the ten year treasury bond is trading for an early indication of where the market may be heading..

1-09-2008 ©LowRateMortgage.com

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