If you look not just at the headline rate but also at the underlying rates, you are seeing a gradual climb away from zero and that has to be seen positively.

I am against tying the merger to the rate deal. It is not doing anything to address the underlying, systemic problems in Maryland's utility market.

Freddie Mac's own economic forecast calls for a mild and gradual increase in 30-year fixed-rate mortgage rates to about 6 percent by the end of the year. Low mortgage rates will sustain a brisk housing market, leading to record home sales and single-family construction this year.

The surprise might be an additional move toward hinting that the process of gradual rate hikes is not infinite.

Price rises are gradually feeding down the production chain. This is starting to affect consumer prices and would make the exit from deflation more solid.

It is difficult to find any part of the economic puzzle that would lead you to be less confident about the full-year 2006 outlook than you were six months ago.