This was the first read of last month’s GDP and the attached Chain Deflator. GDP was anticipated to be +3.2% to +3.6%. The Commerce Department reported 1^st quarter Gross Domestic Product at 3.4. No surprise to the BoxGuess or analysts.

Attached to the Commerce Departments report is a measure of inflation called the Chain Deflator is not as widely watched by analysts, but it is by the bond market. If it were to come in different than the 3.4% to 3.6% range of predictions, the bond market will respond accordingly. It was lower at 2.7% and the bond market opened lower with the 10-year Treasury at -.026% with the rate at 4.751%.

Apparently that was too close to what we thought may be the new floor at 4.750%. Shortly after the 10-year Treasury reversed course and was up as high as +.037% with the rate at 4.814%. Traders moved in and took their profits

At 09:00cdt {14:00gmt} the U of Mich. Consumer Sentiment Report was published. It was estimated at 91.0 to 92.4, but came in lower at 90.4. This did not seem to impact rates.

For the rest of the day the bond market traded along with the stock market. The 10year Treasury closed fairly flat at 4.788% +.011%.

This blog’s newest feature is the BoxGuess. The BoxGuess is a short-term technique to see if the range of expectations will be above or below the actual. The methodology is a secret and will not be made public.

Warning: The BoxGuess is theoretical at best. The author is using this blog to test the effectiveness of the BoxGuess. You can do the same. If you use this blog to test the effectiveness of the BoxGuess you do so at your own risk.

Steve Boxmeyer [612] 799 – 6858

steve@LendWithIntegrity.com