Apparently inflation is still a concern, and the bond market is reflecting that to some degree. The 10-year Treasury is +.021% with the rate at 5.091% in mid morning trading.

It could be a lot worse, and still may be. The FOMC Policy Statement is out this afternoon at 13:15cdt {1:15pm, 18:15gmt}. There is potential for all markets to be impacted by the FOMC. (See yesterday’s post.)

The GDP Report did come out at the market’s opening. A major portion of the GDP Report is the Chain-Deflator. This important measure of inflation was anticipated to be +4.0% annually. It was reported at 4.2% annually. That extra .02% did cause some bond selling, but could have moved rates even higher.

GDP itself was within the predicted +0.6% to +0.8%. It was reported at +0.7%.

The weekly Initial Jobless claims were a bit below the forecast 315k to 319k. 313k employees filed for first time unemployment insurance last week. As an inverse indicator, this may have caused a small amount of this morning’s bond selling and corresponding rate increase.

The Help-wanted Index is usually ignored, but it can occasionally give a picture for the future of the employment picture. The analysts that do track this were looking for a reading of 29, but it was reported at 27.

This blog will report on the FOMC this evening.

Steve Boxmeyer [612] 799 – 6858
steve@LendWithIntegrity.com