The major push and pull has been between regular concern and threat of inflation versus the catastrophic effects of the credit crunch and housing slump that continues to grow worse month over month. Both forces pull rates in opposite direction, with housing weakness pushing rates down, and inflation risk pushing rates up.

This week is a perfect example, with rates rising early in the weak as a result of strong economic data on consumer spending and sentiment only to drop at the end of the week with terrible new housing sales data.

Hopes for 2008 are most optimistically for a rebound and recovery. The duration of the housing slump, the threat of recession are topics vigorously debated especially right now in an election year. 2008 will certainly bring us more change and volatility, and we'll report it here. Best wishes to all readers for a prosperous and successful 2008.

Published on December 28, 2007