The conundrum is the Fed, and why the it keeps raising rates.

Housing may get another mini boost from the recent drop in rates. These data do lag a bit. Still, it is clear that, low rates or not, housing is not on fire the way it once was. The level of activity remains quite high for housing. But the prospects for further growth do not look that strong based on momentum.

The American consumer is like that bad guy in a zombie movie; shoot him; stab him. He keeps coming forward. But in the case of the consumer, it's more like: depress his wage, make him unemployed, ruin his confidence make no job growth, lower his savings rate -- none of it matters, he or she just keeps on racking up those charges.

I think he's basically greasing the skids for the Fed to keep raising rates, and that may not be something the stock market has realized yet, ... and that's why you're not seeing much reaction.

Sentiment is building that the Fed may pause for a while after raising rates to 5 percent next month. That helps shorter-maturity debt, especially two-year notes.

The Fed will keep raising rates as an insurance policy to prevent unwanted inflation. We haven't seen a tightening of financial conditions.