Debt Deal On the Way As Markets React to Reeling Economy

Mortgage rates dove on Friday as the shocking GDP report revealed that the US economy is much worse off than anyone expected. The economy’s growth has barely kept up with population growth over the last two quarters, and, factoring in inflation is practically moving backwards. While the headline 1.3% annual growth in the 2nd quarter was bad, even worse was the revision to the 1st quarter’s figures, which brought that quarter from 1.9% growth to a scant 0.4% growth. Describing this growth as anemic would be an understatement. The resulting surprise drove down stocks and caused Treasury rates to break through recent lows. The 10-year Treasury ended the week yielding just over 2.80%, it’s lowest in over 8 months. Stocks ended their worst week in a long time off over 5% on the week. Meanwhile, Congress and the White House failed again to agree on a plan to raise the debt ceiling.