BCREA ECONOMICS NOW
The preliminary estimate of Q3 US GDP came in at 2.8 per cent, resoundingly beating the consensus expectation of 1.9 per cent. However, a full 0.8 per cent of that growth was due to a build-up of inventories and this report may be noisier than usual due to the government shutdown. It is worth noting that today's release is a preliminary estimate and will be revised in subsequent months.
Stronger than expected economic growth in the United States, coupled with a decent jobs report tomorrow, could put some upward pressure on long-term bond yields, which have fallen significantly since the Fed opted to delay its quantitative easing program. Even so, we anticipate that long-term rates and therefore mortgage rates, will remain stable through the end of the year.
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