January 25, 2024 – Economic Outlook

• January 25, 2024
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

There was a little bit for all in the data with headline GDP for Q4 2023 rising 3.3% while the inflation components declined. Growth was driven by consumer spending rising at a solid 2.8% rate in the quarter. For 2023, GDP was 2.5% after 1.9% in 2022. Jobless Claims rose to 214K versus 200K expected while December Durable Orders were flat versus a 1.1% gain expected. New Home Sales for December will be delivered at 10:00.

As we mentioned in yesterday’s End of Day Recap video, the chances of a recession are dwindling, at least for the foreseeable future. Right now, a rate cut in March is a coin toss but as we know, things can change quickly, especially with the inflation reading Core PCE being released tomorrow.

As expected, the ECB left its benchmark interest rate unchanged and had no glaring headlines in the statement.

The last round of Treasury offerings is today with $41B 7s and comes after weak demand for yesterday’s 5-year sale. As always, we will be watching closely.

Tomorrow brings the Fed’s favorite inflation gauge … the Core PCE.

Next week, the two-day Fed meeting kicks off on Tuesday and ends Wednesday at 2:00 pm ET with its announcement. January ADP and the Jobs Report will also be delivered.

Technically, as seen by the chart, the FNMA 30-year 5.5% coupon has seen some choppy trading this week having tested resistance at par/100 a few times and now rests between support and resistance. Also, this week the 10-year yield dipped down near its 200-day Moving Average of 4.07%, hit 4.18% and is now 4.13%.