GDP growth reaching 5% in Q3 raises lots of questions. Are things finally getting better? Is the economy reaching breakout speed? Is Fed tightening now on our doorstep? Is this the beginning of a sustained upward trend or the apex of our economy before we get dragged down by global conditions?
The chart below shows quarterly GDP growth since the financial crisis. After struggling near 2% annualized growth for many years, the last five quarters make it appear that the economy has shifted gears. This in the face of a sputtering global landscape. It's also rather remarkable that we are seeing growth without inflation ... truly a Goldilocks environment, but how long will it last?
Yesterday's GDP figure caused a severe pullback in Treasuries, which is continuing to a lesser degree today. In the blue circle below you can see the massive spike in the 10-year yield as Treasury prices sold off. Rising ... Log in or subscribe to continue reading.