All interest rate increases aren’t created equal. A rise in 10-year treasury rates from 2%, where they are now, to 3% or 4% is a sign of improving business conditions and opportunities resulting from a strengthening economy. By contrast, a rise in rates from, say, 5% to 7% or 8% is a sign of an overheating economy that is creating systematic inflationary pressures and must be cooled.
Tag Archives: improving economy
Week is Strong
Personal income rose 1.1%, consumer spending jumped a robust 0.7%, the Fed’s preferred inflation gauge rose just 1.3% over the past year, consumer confidence increased, GDP for Q4 was revised up by 0.3% and house prices rose 8% year-on-year! But, unemployment claims were a bit higher, house sales fell a tad and savings remains painfully low. Q1 GDP comes in at or above 2.5%! Sequester, what sequester?