Our Real Estate Blog

Market Update (4/10/2011)

April 11th, 2011 7:05 AM by Lehel S.

This Week; the bond market has Treasury auctions to think about, $66B of notes and bonds beginning Tuesday. The Pres will speak on Wednesday to outline his 2012 budget after finally coming to agreements to increase the debt limit through the remainder of this fiscal year. Politicians debating the stop-gap measure last week could barely get it done, the 2012 budget battle will be much more of an issue with Medicare and Medicaid cuts that most believe will have to be happen. Besides spending cuts to improve the outlook for US debt there must also be revenue enhancements (taxes).
 
Economic data this week has a little more focus with March retail sales, PPI, CPI and a couple of reports on the manufacturing sector. Inflation concerns continue to increase everywhere except at the Fed with Bernanke believing the recent increase in raw prices and most all commodities as a transitory event and his concern that the US economy is still fragile. While that is the case, investors and the markets are moving out of fixed rate investments and into commodities especially gold as a hedge against what private markets increasingly believe, that inflation will get traction by the end of the year. The current consensus is that the Fed will not begin tightening until late this year or into next; there are however increasing numbers of analysts that are beginning to adjust to rate hikes sooner. By the time the Fed actually tightens markets will have mostly discounted higher rates. The bond and mortgage markets remain bearish, look for continued increases in rates over the next six months.
Posted in:General
Posted by Lehel S. on April 11th, 2011 7:05 AM

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