Weekly Information 12/10

Mortgage interest rates increased again this past week as Congress moved closer to extending the Bush Tax cuts, cutting the payroll taxes by 2.0%, and continuing the emergency unemployment payments for another year. It is estimated that this will increase the deficit by $700 billion, adding supply pressure to the bond markets. Also of note, the Treasury auctioned $66 billion in 3 Year Notes, 10 Year Notes, and 30 Year Bonds this past week which was met with mixed demand from the markets. Economic data generally surpassed expectations. October Consumer Credit, weekly jobless claims, the October Trade Deficit, and the University of Michigan Consumer Sentiment Index were all better than expected. Also of note, November Import Prices increased by 1.3% and Export Prices increased by 3.2%.