From my viewpoint, this is one of the biggest head-scratchers right now.

Federal prosecutors going after the Federal Reserve, specifically Chair Powell, adds yet another layer of uncertainty. At the same time, the current President wants Powell out before his term expires in May.

Add in the broader global turmoil: Venezuela, unrest in Iran, Cuba, and even Greenland. Under normal circumstances, this would have triggered a clear flight to safety.

Instead, I woke up to yawns from the bond market.

Is this complacency? It’s hard to say.

Tomorrow’s Consumer Price Index (CPI) for December is critical. Expectations are for year-over-year inflation to remain unchanged or possibly decline slightly. That outcome would be bond-friendly and supportive of lower rates.

On the housing front, Realtor.com released new data showing inventory is up 12%. That’s encouraging news, especially as rates begin to move lower in a more meaningful way.

More supply, combined with easing rates, could finally start to bring some balance back to the housing market.

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