Amy Cutts Market Quotations

With financial markets more optimistic that the economy is expanding nicely, mortgage rates had nowhere to go but up this week. Then, as a result of the GDP figures released today (Thursday), the market began weighing which part of GDP it feels is most dominant, growth or inflation.

The bond markets got a little ahead of themselves, causing yields to rise too quickly over the past few weeks. This week saw a bit of a correction and mortgage rates fell for the first time in eight weeks. Continued volatility in financial markets, however, will keep rates teetering up and down for some time to come.

Shrugging off statements by the Fed last week, mortgage rates remained relatively more stable than bond market yields. Without a key indicator that would move it one way or another, the financial market is in something of a state of limbo.

Every once in a while the bond market does believe Greenspan.

Lower figures for the recently released producer-price index and consumer- price index, and lower but still strong gross domestic product, combined with the seasonal slowdown in the housing market led to another decline in mortgage rates this week.

Expecting job growth on the order of about 150,000 in December, financial markets were taken aback, to say the least, when those figures came in at only a thousand new jobs.