US: Congress Heading Toward DHS Shutdown On Friday
Congress appears to be barrelling towards a shutdown of the Department of Homeland Security on Friday, after Democrats panned a White House counteroffer for reforms to immigration enforcement operations. Manu Raju at CNN reports, "Democrats are unlikely to accept a new White House offer ... unless something dramatically changes, I’m told."
- If a funding deal isn’t agreed by midnight Friday, all agencies under the purview of the DHS, including FEMA, TSA, and the US Coast Guard, will shut down, impacting around 260,000 employees. However, the effects are unlikely to be felt until mid-March as agencies have sufficient funding to maintain operations for several weeks.
- Senate Majority Leader Thune told reporters, “It doesn’t look like we’re going to stick the landing … so we’ll have to go to Plan B,” likely referring to another short-term funding patch that Thune is expected to try to pass when a vote on the House-passed DHS bill inevitably fails today.
- If a deal isn’t struck by Friday, it is unclear when the shutdown will be resolved, with Congress recessing tomorrow and a large contingent of lawmakers heading to Germany for the Munich Security Conference.
- Senator Lisa Murkowski told reporters yesterday, “I’m going to go home and I’m packing for Munich and I’m packing for Alaska. That’s my plan and I’m sticking to it.”
Figure 1: Another US government shutdown by February 14?
Source: Polymarket
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US: Republican Study Ctte Set To Unveil Plans For Second Reconcilliation Bill
The 189-member Republican Study Committee is today set to release a framework for a second GOP reconciliation bill (the mechanism by which the governing party can pass tax and spending-related legislation via a party-line vote in the Senate) aimed at lowering costs. According to a draft text, the bill will be entitled “Making the American Dream Affordable Again." Note: The GOP's first reconciliation bill was the so-called 'Big Beautiful Bill.'
- Punchbowl News notes, “[The plan] shows the fervor with which some Republicans want to spend 2026 on big-ticket legislating. Senate Majority Leader John Thune [R-SD] has been skeptical about another reconciliation package. Speaker Mike Johnson [R-LA] is a bit more interested.”
- Punchbowl notes, “The bill has six categories: home ownership, “health care freedom” and lowering drug prices, reducing energy costs, “rebuilding the American family,” cutting spending and codifying [Trump’s] executive orders.”
- Here are some of the notable policy items, per Punchbowl, “The Don” payment program is a “zero- to low-down payment” mortgage for “creditworthy borrowers.” The bill eliminates capital gains for a home seller if the home is sold to a first-time buyer. Repealing the estate tax, which would cost $281 billion in revenue over a decade.
- “A new “parallel” option for people to buy health insurance in a “separate marketplace” from Obamacare. Send insurance subsidies directly to individuals instead of through credits to health insurance companies, which is in line with what President Donald Trump has called for. Require pharmacy benefit managers to pass on rebates to consumers.”
US DATA: Extreme Anomalies Abound Across December CPI Categories
There were plenty of other oddities in this CPI report (aside from the collapse in moving/storage/freight prices previously noted). Recall that coming into this report we knew that there might be various anomalies stemming from a reversal of November holiday sale discounting for goods products, along with sampling issues from the use of bimonthly metro area surveys (with no October data for comparison due to no survey that month). That's not to mention continued expectation that tariff passthrough would take an upside toll on goods CPI. But the range of significant anomalies on both ends of the table in the December data, and even within categories, has little obvious pattern, making the signal difficult to discern other than that the report overall should be taken with some caution.
- Recreation services, 3.4% of CPI, was most notable in this respect as they saw their largest ever rise - up 1.8% M/M (and this looked broad based with video game subscription prices up 19.5% M/M). The overall index for recreation (5.2% of CPI) saw its largest ever rise (1.2%). Admissions prices (ie to concerts, sporting events) are 0.7% of CPI and had their largest ever rise (3.6% M/M), helping boost the recreation category overall.
- We also took note of Motor vehicle maintenance and repair - which makes up 1% of CPI - print the lowest ever at-1.3%.
- And Wireless telephone services (1.2% of CPI) posted its lowest print since March 2017, -3.3% M/M. That meant overall communcations saw the biggest drop (-1.9%) since 2017.
- Goods were mixed. Overall appliances CPI saw the smallest ever print: -4.3% M/M (0.2% of CPI) with / "other" appliances -5.2% a record lows.
- But "Other household equipment and furnishings" (0.5% of CPI) saw the highest print since October 2004, at +3.0%.
- Also seeing record rises in goods were non-prescription drugs - 0.4% of CPI - up +1.8%, while computer software and accessories - negligible in CPI - saw a record (+7.0%)
EGB SYNDICATION: Greece 10-year 3.375% Jun-36: Priced
- Reoffer price/yield: 99.196 / 3.470
- Size: E4bln (in line with MNI expectation)
- Books closed in excess of E49.5bln (inc E2.05bln JLM interest). Record for a GGB syndication - previously the E40.5bln in last year's 10-year)
- Spread set at MS+58bps (guidance was MS +60/65bps area then revised to MS+60bps area)
- HR: 99% vs 2.90% Feb-36 Bund
- Coupon: 3.375% Short first
- Maturity: 16 June 2036
- ISIN: GR0124042764
- Bookrunners: BNP / BofA / DB (B&D/DM) / GSBE SE / JPM / MS
- Settlement: 20 January 2026 (T+5)
- Timing: Priced 1403GMT / 1503CET. FTT Immediately.
From market source / MNI colour
