[Core inflation remains in check at a 2.2% annualized rate](javascript:commonPopup(‘/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=URI%3aurn%3anewsml%3areuters.com%3a20050913%3aMTFH93267_2005-09-13_21-26-51_N13617660%3a1′,%20540,%20525,%201,%20’printerPopup’) and that could mean that the Federal Reserve may ease up on their short term rate strategy temporarily, but don’t pin your hopes on it. [Despite the weakening of the economy due to Hurricane Katrina, the Fed appears poised](http://news.moneycentral.msn.com/printarticle.asp?Feed=FT&Date=20050913&ID=5109945) to continue to raise short term rates.

The core inflation stats, which exclude food and fuel, are based on economic data for August so they don’t include the affects of Hurricane Katrina. This bodes well for keeping mortgage rates down in the short term as overall inflation appears under control.