Our fear from Wednesday was justified.  I hope you took our advice and locked your mortgage rate.

From Wednesday:

I'm still maintaining my lock-in at loan application recommendation.  I just don't see a tremendous amount of upside to floating the mortgage rate.  There is an underlying fear of stagflation in the markets.  The American consumer had the flu, caused by the arrested access to easy money.  Higher oil prices create a commodity-push inflation effect that The Fed (thankfully) won't ignore.  While I agree with the folks from PIMCo that the consumer's flu could throw our economy into a mild recession, I'm not convinced with their conclusion that the Fed will aggressively cut rates to stave it off.

We have four MAJOR economic reports coming out Friday, all employment related.  If they are anemic, mortgage rates could drop dramatically; lenders will renegotiate rate locks to  reflect that drop.  If they appear inflationary, you'll be protected.

Nothing has changed for the near term; lock-in mortgage rates at application.

I don't see rates shooting up dramatically but they will trend a bit higher.  Wall Street understands that the Fed won't cut rates in October.  Faced with choices between staving off a recession and fighting inflation, Bernanke will opt for inflation fighting every day.  If the risk of inflation supercedes the risk of recession, the Fed won't cut interest rates.

Lock-in rates at application.  Lock-in rates at application.  Lock-rates loans at application.

if things change, you'll find it out here first.