Mortgages traded up last week from too-good-to-be-true 5.5 percent to 5.75 percent, taken there by a surge in the 10-year T-note from just under 4 percent two weeks ago to 4.26 percent this morning. The first leg of the rise was unmistakably Federal Reserve Chairman Alan Greenspan's work; the second, Friday, from new data suggesting of inflation. In reverse order, data first: the core rate of January producer-price increase shot up .8 percent, but was overstated by oddities: tobacco, alcohol and withdrawal of auto-price incentives. Claims for unemployment insurance have fallen to the 300,000-weekly zone, best in five years, and housing starts reached a 21-year high (insistent housing-bubblologists might note that U.S. population reached a 229-year high). Greenspan wore his age well in h...
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