Gross Domestic Product (GDP)
The first of this morning’s three economic releases was the most important of the group and one of the key pieces of data we regularly see. The preliminary reading of the 2nd Quarter Gross Domestic Product (GDP) showed that the economy grew at a 1.2% annual rate during the 2nd quarter, falling well short of expectations. Analysts were predicting a 2.6% rate of growth, meaning the economy was not nearly as strong during the April through June months as thought. It is also worth noting that the 1st Quarter GDP was revised downward 0.3% to a 0.8% annual rate. These readings are very good news for bonds and mortgage rates because bonds are more appealing to investors and tend to thrive during weaker economic conditions. The news should also make a Fed rate hike in September less likely.