Home sales in Southern California are exploding. There is LOTS of construction in Irvine (homes and office space) for the first time in years. Some ZIPs have less than 2-weeks of inventory. I just got back from Europe - Greece was totally DoA (except Mykonos parties), BUT Italy was absolutely packed with tourists and business everywhere seemed brisk. Turkey was absolutely on fire economically.
The best way to keep rates low now is to let air out of the equity markets. Uncle Ben is playing all of us like SillyMuppets.
I'm pretty certain that Uncle Ben will do nothing. That's what I would do - keep the powder dry for an adverse event like a strike on Iran, negative employment data, etc.
There will be some kind of boost, such as buying MBSs. I think the market reaction will be relatively muted, but it won't matter as lame action from Euro leaders will take us back lower...
...since there are too many people waiting to short this thing, there should be some kind of surprise announcement soon after, possibly related to fiscal cliff solutions or something else that will take the market back up to test the 142 area.... but I think we see 133 first, and maybe as low as the high 131's before we go back up.