Mortgage rates are still within a closing-cost argument of 6.25 percent, held stationary by 10-year T-notes locked in trading between 4.5 percent and 4.6 percent. The bond market is in a total standoff: fears of an overheating economy and energy-pushed inflation are matched by belief that a rapidly cooling housing market will slow the economy. In the slowdown equation, it doesn't matter how high the Fed pushes short-term rates; the farther it does, the quicker and more the economy will slow, and the more money that owners of bonds will make in the slowdown. Fed Chairman Ben Bernanke says GDP growth this year and next will be in the 3.5 percent range. If so, with unemployment low and falling, energy price pressure still high, a 5 percent Fed funds rate (up from 4.5 percent today) would be...
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