June 26th, 2007 by jason

Bonds are trading flat this morning, even as two pieces of economic data were reported weaker than expected. First, the Conference Board’s index of consumer confidence fell to 103.9 from 108.5 in May, and the Commerce Department reported new home sales fell 1.6% in May. We have seen stronger than expected new home sales recently and weak existing home sales. It appears that the builder incentives are starting to lose their strength at attracting buyers to new homes. Certainly the recent up-tick in home mortgage interest rates will have a similar effect. Persistently high gasoline prices and higher interest rates have put the damper on the mood of many consumers, consequently slowing the sale of new and existing homes.

The bond market has been relatively quiet the past day or two. Recent auctions have seen tepid demand from foreign central banks, which is another cause of the recent spike in U.S. interest rates. The Fed begins a two day meeting Wednesday, with their rate decision and policy announcement scheduled for Thursday, at the conclusion of the deliberations.

tags: bonds, economics, economy, interest rates, mortgage rates

Content Tags:Bonds Economics Economy Interest Rates Mortgage Rates