Good Tuesday AM,

As things thin out heading into the holiday, bonds markets, as usual, take on a weaker bias and are under pressure today. The 10-yr at 1.66% is not inspiring. Not much has changed but there’s not a lot of focus/apprehension on inflation. Tomorrow we get some important data adding concern that the Fed could be tasked with raising rates sooner than originally anticipated. If I had to guess, I would imagine that the Biden administration had a strong chat with Jay Powell about inflation. No doubt the Biden poll numbers are causing a concern for the midterm election and inflation is turning even his own party against him. Powell will make his own decisions, but he has to be concerned with how long these prices will remain elevated. My answer is simple, prices will inflate until the supply chain is repaired, and this will take time. For now, be careful about floating into tomorrow’s reports. Nobody knows what they will look like and a hot one will ruin your day.

Please remain safe and healthy, make today great.