Feds Cut Rate coming soon…

FOMC Meeting | Reported [1:15pm Central] | ELEVATED

ADP Employment Report | Reported +10,000 | Est -55,000 | Prior 8,000 | MODEST

Employment Cost Index | Reported 0.7% | Est 0.8% | Prior 0.8% | ELEVATED

GDP | Reported 0.6% | Est 0.4% | Prior 0.6% | MODEST

GDP Chain Deflator | Reported 2.6% | Est 3.o% | Prior 2.4% | ELEVATED

Chicago PMI | Reported 48.3 | Est 48.5 | Prior 48.2 | ELEVATED

Crude Inventories | Reported [10:30E] | Prior 2,421,000 | MODEST

The markets appear to be anxiously awaiting the Feds Cut Rate announcement today.  The notoriously misleading ADP report came in much better than expectations signally job growth.  Friday we will see the real Employment Report to gauge the economy more accurately.  The employment cost index, GDP, and GDP Chain Deflator all come in better than the revised expectations.  GDP Chain Deflator is an important inflation index, so it coming in better than expectations is actually a good thing for Mortgage Backed Bonds.  If the Fed has decided to hold off on rate cuts because they believe the economy has shown signs of recovery, that will reassure bonds traders that inflation will not continue to be ignored and should be good for Mortgage Rates.

GDP, Gross Domestic Product

GDP is the best snapshot of the US economy.  It is a measure of the size of the economy by the total value of all the US goods and services.  The optimal increase in Gross Domestic Product is between 2 and 2.5%.  Read more