The I's, meaning the two countries that start with an I have recently raised rates. Israel raised interest rates in late 2009 and this week India followed suit with an increase in rates. It isn't just countries that start with the letter I that raised rates in the last few months but this move this week is the one that hit my radar screen the most. In addition to Israel and Norway raising rates at the end of 2009. Malaysia and Australia raised rates earlier this month.
The move by India's central bank now makes 5 central banks raising rates. The Reserve Bank of India said that this is the first of what may be multiple moves to make sure inflation doesn't get out of control from all the cheap money the last 2 years. Stocks in India didn't respond well with this move. With the Fed raising the discount rate but not the fed funds earlier this year, they half stepped it as our economy still remains soft.
The effect on mortgage rates seems muted so far but other moves but other central banks are worth watching in the coming months.