Rates inched lower following the release of preliminary second quarter GDP figures. The Commerce Department said the economy contracted 1.0% last quarter, beating forecast. However, first quarter data was revised lower to -6.4% from -5.5%, more than offsetting the better than expected second quarter results. Consumer Spending declined 1.2%, while core PCE, the Fed’s preferred measure of inflation, rose at a tame 2% annual rate. Both readings helped mortgage-backed securities (MBS) markets. Yesterday’s Treasury auction of 7-year notes was more successful than the two previous days’ auctions. Next week may remain volatile for MBS markets, with the release of key economic data each day, including the closely watched Nonfarm Payrolls report due out Friday.