Update

Today’s Dec Retail Sales print (+0.6%) was just inside of expectations. Still, much more there from the consumer than hardly anyone expected for this period, back a few months ago.

We also saw Dec CPI; it was non-threatening, the core up 0.1%. The headline number was up 0.5%, mainly due to energy prices. Still, the headline is now only 1.4% above the year ago level. Core prices are only 0.8% above their year ago level. As Steven Wood reminds us, this is one of the slowest paces in the 52 years of data collection.

Today’s data throws some slack to the Fed. We don’t need the liquidity but they’re intent on providing it, so fine. With tame price numbers, longer-term yields will allow them get away with it for a little longer.