BLOG POST FROM Shannon Renevier, Rocky Mtn Bank 406-556-7677

Vice President Joe Biden commented over the weekend that “the administration miscalculated how bad the jobless problem would be”, prompting speculation that more stimulus might be in the works during 2009. Additional stimulus would translate into more inflation and also would mean more Treasury auctions to pay for it, creating even more supply to be sopped up. Many members of Congress admittedly voted to pass the first stimulus package without even reading through it, only to now look back and discover that most of the almost $800B was not earmarked to actually stimulate the economy, but more towards social programs. This will be an important story to watch as it certainly could create a negative impact on Bonds and home loan rates down the road.

On that note, Treasury auctions caused a bit of a rollercoaster last week, as Wednesday’s auction was well received, helping Bonds and home loan rates improve nicely…but Thursday’s auction did poorly, causing a sharp worsening reversal for Bonds and home loan rates.

Earnings season for Stocks kicked off with mostly soft reports as expected, depicting the continued difficult economic climate. Next week, earnings season continues and will bring news from the financial sector – which is sure to be interesting and potentially market moving.

As mentioned – Bonds and home loan rates improved during the early part of the week, but started to worsen towards the end of the week – and look as if they may be ripe for some continued worsening. As always, I will continue to watch carefully – but let’s talk soon if you need to make a decision regarding a home purchase or refinance, so that we can ensure you are positioned properly.