Rates rose .125% last week, on target with last Sunday’s WeeklyBasis prediction that “rates should be even to up slightly.” As of Friday evening, there’s no budget deal in Washington so politicians will continue work on a budget compromise, which if it comes, will enable the debt ceiling to be raised. August 2 is when
GDP
Snapshot of next week, click image for details. WeeklyBasis review of last week, outlook for next week to follow.
GDP: – Final 1Q2011 1.9% vs. 3.1% for 4Q2010 – Imports up sharply, exports slowed – Consumer spending slowed, partly from slowdown in autos/parts – Government spending fell much more than in 4Q – Decline in federal spending (mainly defense) largest since 1Q2000 – Decline in state and local spending largest since 2Q1981 – Business
Today’s BEA (Bureau of Economic Analysis) second of three 1Q2011 GDP readings shows a weak economy at +1.8% growth. Worse yet is that BEA using dubious assumptions to get from nominal to real (infaltion adjusted) data. BEA assumed that inflation in 1Q2011 was an annualized 1.9% despite the fact that the “official” metric from BLS
GDP: Second of three 1Q2011 GDP readings was +1.8%, the same as first reading and down from +3.1% 4Q2010 reading. Final 1Q2011 reading June 24. Looking inside and remembering that GDP=C+I+G+(X-M) (where C=Consumer Spending, I=Investments, G=Government Spending, X=eXports, M=iMports) let’s break out the components: C was +2.2% in the quarter contrasted with +4.0% the previous
Rates set new 2011 lows last week after mortgage bonds rose a third straight week. Previous lows were set March 16 in the aftermath of Japan’s earthquake Libya’s revolution. New lows are the result of unstable economic growth, jobs and housing data. Bonds are a safe buy when uncertainty sets in, and rates drop when
The Economist this week explores how the U.S. reports certain economic stats, including whether the U.S. over-reports GDP only to revise it down later. It’s a short, worthwhile read—graph, excerpt on GDP, and story link below. The first of three 1Q2010 GDP readings came out last week at 1.8%, down from 3.1% in 4Q2010. The
Rates ended last week near 2011 lows achieved March 16 when Japan’s earthquake aftermath and Libya’s revolution were both at highly uncertain stages. Mortgage and Treasury bonds were the safe bet then, and rates dropped as those bond prices rose on buying rallies. Bonds then sold and rates rose as markets shook off Japan and
Stocks are up today (Dow +73, S&P +8) as global growth sentiment outweighs the “not-a-war” in Libya, fiscal crisis in Europe, Japan’s earthquake aftermath, and declining consumer sentiment. Bonds are slightly higher (10yr Note +3 basis points, FNMA 30yr 4% coupon +12 basis points) despite the stock rally and hawkish inflation statements from two Fed
Stocks are up today (Dow +73, S&P +8) as global growth sentiment outweighs the “not-a-war” in Libya, fiscal crisis in Europe, Japan’s earthquake aftermath, and declining consumer sentiment. Bonds are slightly higher (10yr Note +3 basis points, FNMA 30yr 4% coupon +12 basis points) despite the stock rally and hawkish inflation statements from two Fed
The third of three 4Q2010 GDP readings this morning was revised up to +3.1% from the last reading of 2.8%. Below is a chart from CalculatedRisk showing quarterly GDP growth over the last 30 years. Current quarter in blue, dashed line is median GDP growth rate of 3.05%. Click chart for full size.
Last week, rates were steady a second straight week following a .375% rate spike the first two weeks of February. This despite lots of data showing manufacturers are facing significant price inflation which may soon be passed onto consumers. Rates would normally rise on inflation data, but consumer inflation came in flat and rate markets
Below are snapshots (with links) of five big data points markets are trading on today. U.S. rate markets—aka mortgage bond markets—are taking four of them as non-threatening: flat U.S. retail sales, weak Eurozone economic growth, less-than-expected Chinese inflation, and despite higher UK inflation, markets are shrugging it off. For now, markets are also ignoring the
Rates rose .375% last week, which means $116 more per month on a $500,000 loan. Below is a brief explanation of why this happened and what to expect next week. Let’s back up to Friday, January 28 to explain why rates spiked. That day, GDP showed the economy grew 3.2% in 4Q2010, a nice improvement
Before presenting rate predictions for 2011, it’s worth noting that all forecasts are subject to the whims of highly volatile rate markets. What follows is an explanation of how rate markets work, how rates have behaved since the financial crisis began in 2007, then the outlook for this year. All rates discussed are 30yr fixed
Rates are down to about 4.75% today as turmoil in Egypt is causing stocks to fall and bonds to rise. The Dow is currently down 172 points and mortgage bonds are currently up 34 basis points (4% FNMA 30yr). When bond prices rise on this kind of rally, rates fall. HuffingtonPost has lots of Egypt
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