Healthy and surprising bond purchases in Europe today prevented Treasuries from selling off on a morning full of better economic reports. Constant global selling this month was one reason for woeful UST performance, so domestic traders welcomed the chance for a break. Yields are still within their trend channels as stocks decide what to make of this afternoon’s news from the Mueller’s Russian investigation indictments. The S&P 500 made it back to resistance at 2750 before falling on the Justice Department announcement. Only three of the 12 major sectors of the S&P 500 are in the red into the close. Heading toward the second half of the first quarter, a thorough but short look at how the bond market views core questions of Fed policy, inflation, and supply. The first page summarizes baseline views, the confidence level supporting those views, and how changes might affect interest rates. Then, several charts to track thinking about the Fed and inflation so far this year. Inflation Lab takes an inside look at the surprising size of January’s CPI jump while putting it into a 6-month context. No longer looking at year-over-year change, the charts express recent price increases on a short-term, annualized growth rate. This week’s inflation reports have put the greatest pressure on the 5-yr maturity without further increases in 10 or 30 year bonds. In GSE Update, tables to examine annual and quarterly performance of the single-family business lines at Fannie Mae and Freddie Mac after they reported earnings this week. Top line revenue growth remains hard to come buy while financial performance allows both to move ahead in the 10th year of their awkward conservatorship.