The big news in mortgage pricing is oil. Again today, oil topped $143 a barrel and this means that the price of almost everything goes up. When the prices go up, that means inflation. When you have inflation, that means that mortgage rates, that hate inflation, go up.

What can be done about it? The best thing to help inflation would be to lower the price of oil. Oil is priced in dollars, so a weak dollar means higher priced oil. Oil has doubled in price since the Fed started lowering the discount rate and the dollar became weaker agains the Euro. Higher rates by the Fed would prop up the dollar, possibly lower oil prices and stop inflation (or slow it down.)

Will this happen in the near future? I doubt it. The Fed is more concerned with a sluggish economy than it is with inflation right now. The European Common Bank is only concerned with inflation and is expected to raise their rate this week. Interesting times in a global economy. Will one party be better than the other? Who knows, time will tell.