Quick Economic Note

The 7 year Treasury auction yesterday was smaller in size and better in tone than the ones earlier in the weak.  The interest rate still rose from the prior auction of 7 year notes, but the dynamics of demand and buyers were better.

The updated estimate of GDP growth for the fourth quarter of 2023 was issued and was slightly lower than the initial estimate, but what was more important was that the inflation rate was slightly higher.  Personal income and the savings rate were lower than the initial estimate.  What went up?  Government spending.  Government spending is propping up the economy, but adding to debt and interest rate issues.  Inflation is not disappearing, I think it may re-accelerate, particularly if the economy is as strong as official figures portray.  So interest rate cuts are unlikely any time soon.  (BEA Release)