Uncertainty about the pace of global economic recovery and growth continued to drive the financial markets last week causing investors to move to relatively safer assets, including mortgage-backed securities (MBS). Greece and other troubled European countries will be forced to reduce their spending, Chinese officials indicated they will begin to adjust monetary policy to combat rising inflation, and the US government will begin to debate various proposals for financial regulation. These developments pose a threat to economic growth, and in response to periods of uncertainty, investors migrate toward safer assets such as bonds in an effort to reduce risk. Greater demand for bonds, often comprised of MBS, pushes mortgage rates lower. And, luckily for the US policy makers, economic reports released last week showed inflation remains extremely low, and thus continued low interest rates will not unnecessarily burden the economy. In fact, the Core Consumer Price Index for April showed inflation fell to the lowest level in 44 years. Currently, the 30-Year Fixed sits at 4.375% (4.523% APR) and the 15-Year Fixed is at 3.875% (4.137% APR)… the lowest mortgage rates of 2010! This week is filled with economic reports that could influence mortgage rates. This morning, we learned that Existing Home Sales rose 7.6% in April to the highest level in five months as buyers took advantage of the expiring federal tax credit. Later this week, we will see New Home Sales, Durable Goods Orders, GDP, Consumer Confidence, and the Treasury will auction $113 billion of short-term notes.