I don't think that the last two increases in the fed funds rates are the beginning of a major increase in corporate or consumer rates. The prime rate has not changed, as far as I know is still at the bottom here at 4.5% (you have to go back to 1959 for such low prime).
The last employment report was strange since the household survey indicated growth of more than 600,000 jobs while the employment rate as derived from business reports was up only some 32,000. These two numbers surely don't jive (and there was a 75,000 down seasonal adjustment). Of course, the crude picture is becoming pivotal, more for its psychological impact then its real impact on consumers, since crude is a much smaller piece of the economic pie than it was in the 1974 oil shock. Do we get a recession or economic slowdown late in 2005? I think it is probably unavoidable, and if crude stays high, it might even start earlier than I thought it might, but something tells me that too many things went "right" for crude bulls simultaneously, and that rarely stays that way for long.
If Bloomberg is to be believed, mortgage rates have actually declined in the last three months, 30 years fixed went from 6.08% to 5.46% currently and the 15 years ARM from 5.44% to 4.86%, and in both cases these are lower than a year ago with fed rates at 1% or so (5.98% and 5.31% respectively).
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