"?Most economists now believe that the economy will come back in the second quarter and wipe out the 0.6 recent real growth in the first quarter. They suggest that the economy will grow by 2.5 percent for the rest of the year. They also give the Fed high marks for successfully walking the knife edge between inflation and growth, holding short term rates steady. I don't agree with any of this. I think the economy is still weak and that inflation, as felt in the pockets of most American households, is a growing problem. But let's grant my colleagues the benefit of the doubt for a moment. If the economy is beginning to grow faster, and if the Fed is truly finished with short rates for a while, then we will see the recent rise in mortgage rates continue. First, a faster growing economy will put more pressure on companies to expand production and this means more borrowing and higher rates. Second, financial markets, which have for so long anticipated a rate cut by the Fed, will now factor the new outlook into rates and they will rise. This is what has happened over the past several weeks. So"?now you have a housing market beset by excess inventory and foreclosures facing higher mortgage rates as it attempts to reverse the slide of the past year. It's still going to be a tough time for real estate.