Good Thursday AM,

And the start of this week’s inflation data.

It came in hotter than expected, and at 5:30 am while watching the data release, I had a pit in my stomach. The 10-yr jumped to 4.06 and mortgage bonds were off 51 bps. It felt like groundhogs day from 2023. The data was CPI month/month expected +02.% increased to +0.3%, year/year CPI thought to be +3.2% increased to +3.4% and up from 3.1% from November. Core CPI forecasts expected month/month to increase 0.2% reported +0.3% but unchanged from November; year/year core +3.9% against 3.8% expected and down from 4.0% in November.

Traders sifted through the data and realized it wasn’t quite that bad.

The 10-yr yield dropped back to 4.03% and mortgage bonds rallied and are now up 20 bps. We’re not out of the woods yet, as we have PPI (inflation at the producer level) tomorrow. Hopefully no surprises. The market feels like it wants to push rates lower. If you did float, you dodged a bullet today. The reaction could have been far worse.

For all of the crypto bulls and pundits…

SEC Approves Bitcoin ETFs for Everyday Investors

The U.S. Securities and Exchange Commission voted Wednesday to allow mainstream investors to buy and sell bitcoin as easily as stocks and mutual funds, a decision hailed by the industry as a game changer. The SEC decision clears the way for the first U.S. exchange-traded funds that hold bitcoin to be sold to the public.

Please stay safe and healthy and make today, great!