Although it seems pretty quiet out there, and MBS trading volumes appear a shade below normal, there continues to be news that shows the US economy is still pretty weak. And, usually, a weak economy does not push rates higher (forgetting for a moment the size of our deficit and our reliance on foreign purchases of our debt…). There is no inflation, unemployment continues to plod along, and even the Philly Fed Index yesterday dropped. If we are staring at a double-dip scenario, why is the stock market hanging in there? Profits are better than expected due to cost cutting, temporary worker hiring has increased, and investors have to put their money somewhere, right? Of interest to note is that the Conference Board’s Leading Economic Indicators rose 0.4% in May and last month’s decline was revised to flat from -0.1%. A slow recovery…
-Rob Chrisman
