The credit markets have concluded that inflation risk now forces the Fed into a sustained series of increases in its overnight rate, presently 2 percent. Interest rates -- all of them -- spiked in the last 10 days. Lowest-fee 30-year mortgages to 6.625 percent (if you're a shady character, FICO under 720, make that 6.75 percent), 10-year T-notes to 4.2 percent, and Fed-tied 2-year T-notes to 2.9 percent (up 0.55 percent this week). The credit markets jumped to Fed conclusions after: oil hit $135; European Central Bank Chairman Jean-Claude Trichet indicated a tilt to tighten there; a string of inflation-centered speeches by Fed officials; and a rebate-bloated 1 percent pop in May retail sales. It is folly to quarrel with a market move like this, but that's what I'm going to do. Think of the very first game of rock-paper-scissors, players uncertain whether scissors would cut paper, or paper would hide them; scissors would break on a rock, but not if stabbing the hand holdi...
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