Freddie Mac released its weekly survey of residential mortgage interest rates and announced they have risen; they have risen to levels not seen in about a year. 

The 30-year fixed rate loan averaged 6.63 percent (7/24/08).  The reason given for the rise was a result of inflation pressures and the expectation that the Fed will increase rates later this year.

It seems that we are being mislead; mortgage rates are higher because Fannie Mae's and Freddie Mac's fees have increased and so has the spread all in an effort to keep afloat and possibly make up the large losses incurred.

The credit contraction will trickle down even more and affect most people and businesses but will the result be inflation or deflation?

The road ahead will be a very rocky one.  Maybe it would be wise to hold on to those SUV's despite the high gas prices.