Rates were little changed Thursday as mortgage-backed securities recovered from yesterday’s late sell-off triggered by a more hawkish Fed statement than expected. The Fed upgraded its assessment of the economy, saying that labor market slack, a key reason for the Fed Funds rate low, is “gradually diminishing”. This morning, the preliminary estimate for third quarter GDP came in at 3.5%, above the consensus forecast of 3.0%. However, volatile defense spending provided a significant boost during the third quarter, while other key components, such as business investment and consumer spending grew more slowly than expected. Separately, weekly Jobless Claims rose to 287,000, above expectations. Results from today’s 7-year Treasury auction will be released at 1:00 PM.