From the Desk

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Recent Economic Commentary

Brandon Casey, Member Strategies - 1/26/2023

U.S. stocks are mixed this morning as investors digest corporate earnings and multiple economic data releases. Diving right into the data, the first estimate of fourth quarter U.S. GDP showed the economy grew at an annual rate of 2.9% during the quarter, just above expectations of 2.8%. Consumer spending was up 2.1% during the quarter, while residential fixed investment plummeted 26.7%. The Core PCE Price Index, the Fed’s preferred inflation measure, rose 3.9%, down from 4.7% last quarter.

Elsewhere, initial jobless claims unexpectedly fell to 186,000 last week, down from 192,000 and the lowest level since April 2022. Initial claims were expected to increase to 205,000. Continuing claims increased to 1.68 million.

New homes sales unexpectedly increased in December, up 2.3% to an annual rate of 616,000. However, November saw a large downward revision, from 640,000 to 602,000. Sales were down 26.6% from a year ago. The report also showed that the median sales price was $442,100 down from $459,000 the previous month.

Durable goods orders jumped 5.6% in December, well above expectations of 2.4% growth. However, the report is not as strong as the headline number indications. Core capital goods orders, which closely align to business investment in GDP, fell 0.2% for the month, as expected.

U.S. Treasury yields are higher this morning, with the 2-year Treasury yield up 2.5 basis points to 4.16%, the 5-year Treasury yield up 3.2 basis points to 3.58%, and the 10-year Treasury yield up 1.8 basis points to 3.48%. Shorter-term advance rates are mostly flat or lower, while longer-term rates are higher.

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