Hi, Focus on this months issue is on Central Banks Models for pricing rates, wage growth or lack of & the output gap. Wages in North America have grown modestly at best. Expectations, based on previous economic cycles would be to see wage growth at much higher levels than what we're experiencing today. Since the largest multinational firms no longer have the pricing power they used to, the focus on profitability is in lowering costs. This coupled with the fact that many new jobs are "poor" jobs, leads to lower than expected wage growth and therefore lower than expected inflationary pressures.Prediction is for another .25 increase in the Prime Rate and a .50% decrease, yes decrease in 2007. We've seen a recent spike in bond yields around the world due to the last US bond issuance not being as popular as anticipated (below article attached). However, CIBC World Markets is predicting a 10 year bond yield at 50 bps lower by Dec 2006 and nearly 75 bps lower by Dec 2007. Both prediction should be encouraging to mortgage markets with lower rates anticipated through 2006 and into 2007.