The annual revision to GDP last Friday was a non-event. The annual revision, which goes back 3 years (from 2009-Q1 through 2012-Q1), the BEA revised the growth profile marginally (2009 +0.4%, 2010 -0.6%, 2011 +0.1). The net result was that real GDP level in 2012-Q1 was 0.1% higher than before the revision.Following the “out of the left field” annual revision last year, market started to price in QE. It eventually got one when Chairman Bernanke give hints of QE2 in a speech at the Jackson Hole Meeting. Looks like market was expecting, or more appropriately, protecting against a similar surprise.
When the annual revision came in as a “non-event”, treasuries sold-off. Last Friday, yield on treasury rose from 1.40% to 1.60% before settling at 1.55% - 20bp move in 10Y treasury is a huge move.
