Mortgage Rates Pushed Up by Inflation

Mortgage rates are rising, putting additional pressure on the troubled housing market, and a new report on inflation suggests that rates might go up even more.

With mortgages already ticking past 6 percent, the U.S. government reported Tuesday that wholesale prices shot up 1 percent in January. Wholesale prices, the cost of goods before they reach consumers, have now risen 7.4 percent in the past year, the largest increase since 1981.

The report not only could force mortgage rates even higher, it also suggests the nation might face a return of the dreaded stagflation, the 1970s-era phenomenon in which prices shoot up while the economy shrinks or stagnates. That would make it increasingly difficult for federal policymakers to steer a course between stimulating the economy and keeping a lid on inflationary forces.