Speaking in a Bloomberg Television interview, noted hawk Philadelphia Federal Reserve President Chuck Plosser said the Fed may have to hike rates even as housing prices continue to fall.

Plosser commented that the economy has not changed much in the last few months and that rising prices pose the biggest challenge to the economy. Plosser noted that...

Economic conditions across the U.S. "slowed somewhat," according to the Fed's Beige Book on Wednesday. Five of the 12 districts were said to have weakened since the last report six weeks ago, while Chicago's economy was "sluggish" and growth in Kansas City had moderated. The remaining three districts saw slight increases in activity.

Residential real estate markets "remained sluggish in a majority of districts," the report said, with residential real estate lending and consumer lending showing more weakness than commercial lending.

Although he is not pleased with some parts of the housing bill, U.S. Treasury Secretary Henry Paulson said it was easy for him to recommend to President George W. Bush to sign a housing rescue package into law on Wednesday.

Rates for both short- and long-term mortgages tumbled last week according to Freddie Mac's Primary Mortgage Market Survey.

The Mortgage Bankers Association (MBA) released the results of its Weekly Mortgage Applications Survey for the week ended July 18 on Wednesday. Mortgage activity as measured by the volume of loan applications...

Economists largely agree that the Beige Book document to be released Wednesday by the Federal Reserve won't receive extended attention from markets, which are more concerned with forward-looking data. The report will likely say that economic conditions are soft across the country, with a few pockets of exceptional weakness and moderate growth.