Treasuries and mortgage bonds are falling this morning on speculation that the U.S. recovery will fuel inflation, reducing demand for debt at this week’s government auctions.
Mortgage bonds are down on this morning’s data. Today’s government reports showed durable goods orders rose in November and initial jobless claims fell last week to the lowest level since September 2008.
Treasuries and mortgage bonds rose for the first time in four days after a report showed that spending by U.S. consumers rose less than forecast in November.
The stock market is up and mortgages are falling, even after the GDP report showed the world’s largest economy expanded less than forecast in the third quarter. Investors are fearful that the U.S. recovery will fuel inflation and reduce demand at record government debt sales.
Today’s GDP report revealed a slower than expected growth in the third quarter. Last month the GDP was 2.8%, and before that October showed promise with a 3.5% GDP. However, for the third quarter overall GDP from July through September came out at only 2.2%.
The Treasury is expected to announce that they will be auctioning a total of $120 billion. Some key economic data this week includes new and existing home sales, the latest survey on consumer sentiment and November’s durable goods orders.
Today, there are no scheduled economic releases. This morning, treasuries and mortgage bonds are opening relatively unchanged from yesterday’s close.
Both Treasuries and mortgages opened strong this morning. Today’s releases included Initial Jobless Claims (+465k), and Continuing Claims (+5180k). Actual Initial Jobless Claims came in higher at +480k, and Continuing Claims came in slightly higher at +5186k.
According to a Huffington Post article, more than 800 voters were polled on this simple question: “Who do you think Federal Reserve Chairman Ben Bernanke cares about more, Wall Street or Main Street?
The market is fairly flat this morning ahead of the 2:15 p.m release of the FOMC rate decision. Market expectations are for the Fed to repeat its pledge to maintain Fed funds near zero for an “extended period”.