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Out of the Zone!!!!

This morning, the Personal Consumption Expenditure Index was reported at 0.2% for the month of November, pushing the year-over-year core rate to 2.2%...and ouside the Fed's target zone for core inflation 0f 1-2%.  Although some Fed members felt a larger cut to the Fed Funds Rate was needed - this report underscores the wisdom of sticking to a .25% cut...and may take a cut in January off the table altogether.

The November Personal Income and Spending Report revealed a negative personal savings rate, showing that consumers spent more than they earned.  Personal Income rose with a 0.4% gain, a little less than consensus estimates of 0.5%, but Personal Spending jumped to a 1.1% gain, significantly greater that the consensus of a 0.7% rise and it largest increase in over three years.  Overall, the healthy spending number shows the consumer is still alive and well...but perhaps at the expense of savings.  It is important to talk with your mortgage professional for mortgage strategies that will help you manage debt more wisely, and save for your future.