Inflation numbers are good for those who want a rate cut. The PCE deflator shows moderating inflation. U.S. futures--as well as European bourses--are also rallying because of President Bush's proposal to help homeowners who cannot pay their mortgages. Mr. Bush is proposing to raise the ceiling on the amount that a mortgage can be refinanced with federal insurance, and tax breaks for those whose mortgage debt is forgiven, among other proposals he will outline later this morning. Some can be done unilaterally by the preisdent, others would require action by Congress. Several Democrats already have bills floating in Congress.
Home builders like Beazer, Hovnanian, KB Home and Centex are all up 4%-7% this morning.