Why have the 30 year fixed rates gone up rather than down in the past two weeks?   Many reasons all pointing to inflation seem to be the answer.  When the Fed lowers short-term interest rates, they typically do this to curb inflation. They want to grow the economy to stop inflation and as a result increase the cost of long-term borrowing.  This means your mortgage rates.  The mortgage rates are dictated by the value of mortgage backed security bonds. These security bonds are thousands of mortgages packaged as one and sold on Wall Street. In recent decades, the global financial markets have been defined as Wall Street. As the credit risks grow deeper and the chance of defaults increase, these bonds become a greater risk. As the risk increases, it becomes harder to sell. When it becomes harder to sell, the value goes down. When the value goes down, the profit goes down. When the profit margins decline, the yields (rate) goes up to make up for lost profits in Singapore. And so on, until it gets to Main Street USA for the full effect.  Higher mortgage rates to people that truly need lower rates.  I do not know what to tell you and I do not know what to tell my clients.  How to I explain this to Mr. and Mrs. Jones? How do I explain that the rates went up a ¼ point today because the price of oil hit $100 a barrel or the price of gold went up or the price of wheat has sored.  How do I explain to the poor person that has to make ends meet and give shelter and food to his family that some Sovereign Fund in Singapore is making hand over fist on his high interest rate? I do not know. Which is why I am writing this blog entry at 1:41PM.  – Dale Siegel