Good Tuesday AM,

No important data out today so it is all about positioning for tomorrow’s CPI. Where does it come in? Oddly, the core CPI is expected to have worsened to 5.6% from 5.5% and the overall CPI is seen dropping to 5.2% from 6.0%. I think the former is a bit pessimistic and the latter is a bit optimistic, but we will see in about 20 hours. For the moment, bonds are slightly weak but in a tight holding pattern until tomorrow.

ANYTHING can happen tomorrow.

In addition to the CPI reading, we also get the minutes of the last Fed meeting (and it is MBS rollover day which always skews the way bond prices look but does not impact rate sheets). If the Fed shows a hawkish tone and CPI comes in above expectation, we will see a sell off unless something extraordinary happens to stop it. Of course, the opposite is true as well. For now, the ten-year must hold below 3.50. If those things can happen, we should see our rally resume if tomorrow’s news happen in our favor.

And with not much more meaningful news to share, I thought I would include a piece on greed… it is not unexpected, but you would think that people (especially in Congress) would be making just better choices.

Two lawmakers reported trades in bank stocks last month as they worked on government efforts to address fallout from two of the largest bank failures in American history. The disclosures, by a New York Republican and an Oregon Democrat, mark the latest instance of congressional stock trading intersecting with official business.

Rep. Nicole Malliotakis (R., N.Y.) bought stock in a regional bank before a subsidiary agreed to take over Signature Bank’s deposits following its closure. Days before she bought the stock, she said she met with financial regulators to discuss the bank’s closure. Rep. Earl Blumenauer (D., Ore.) reported three trades in bank stocks as he co-sponsored legislation seeking to strengthen restrictions on financial firms in the wake of the bank failures.

The trades could intensify the pressure on Congress to restrict stock trading by lawmakers. That effort briefly gained momentum last fall, when House Democrats released a bill to ban stock trading by members of Congress, judges and senior executive-branch officials, but has since stalled. A bipartisan group of lawmakers earlier this year reintroduced a bill seeking to ban congressional stock trading. Lawmakers are uniquely positioned to gain insight about particular industries in the course of their work. But beyond rules mandating regular disclosure and the laws against insider trading, they face no other restrictions on what stocks they are allowed to own or trade. They are required to disclose any trades by them or their spouses of $1,001 or more in stocks, bonds, commodities, futures and other securities within 45 days, and must disclose their assets and liabilities every year in broad ranges.

A spokeswoman for Ms. Malliotakis said the lawmaker made the trade at the recommendation of her financial adviser and that she wasn’t aware the bank planned to bid on Signature Bank assets. A spokeswoman for Mr. Blumenauer said that the trade was made by his wife and that he wasn’t aware of it at the time. Several lawmakers have faced criticism for stock trading over the years. Former Sen. Richard Burr, a North Carolina Republican, faced U.S. investigations over stock sales valued at as much as $1.7 million in February 2020, while sitting on committees that received detailed briefings on the then-growing pandemic. Both investigations later closed without enforcement action.

Please remain safe and stay healthy, make today great!