The slow drift downward in long-term rates stopped this week, the 10-year T-note at 4.69 percent, mortgages settling just above 6.25 percent. Once again, good economic news dampened recession hopes in the bond market: orders for durable goods were very strong in March, up 3.4 percent, double the forecast, and February's orders were revised up half-again the initial report. Orders for durable goods trend along with capital spending by business, and weak business spending during the winter was thought to prove economic weakness spreading from housing and autos. But, not yet. Today's first-quarter Gross Domestic Product data confirmed the pattern: overall GDP growth was the poorest in four years, only 1.3 percent. However, consumer spending was up a solid 3.8 percent, and weak housing by itself sawed one full percentage point from GDP. The immense hopes in the bond market that housing will pull the economy down are -- so far -- misplaced. Housing has slowed the economy, but not tipped ...
by Brad Inman | on Mar 21, 2017
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