STIR: Dec FOMC Pricing Set For Most Dovish Close In Nearly 2 Months

• Trading desks report appr 250,000 FFF6 sold at 96.365 (-.0025) in the last couple minutes, appr DV01 $10.4M.
• Total volume in the contract now 367,250.

• -10,000 3QH6 96.25/96.50 put spds vs. 0QH6 96.50/96.75 put spds, conditional curve flattener (Reds vs Blues), 4.5 cr

President Donald Trump has just begun speaking to the House Republican retreat taking place today in Washington, D.C., Livestream here. These will be the first direct comments from the president to any members of Congress since the operation to capture Venezuelan President Nicolás Maduro over the weekend. 

• The retreat will be the first opportunity for Republican lawmakers to meet in person since the Christmas recess. The primary topic of conversation and debate will be on strategies the Republican party could or should deploy to try and maintain their (razor-thin) House majority ahead of the midterms in November. Punchbowl News reports Trump is expected to address Republican ‘wins’ in 2025, rather than the situation in Venezuela.
• The news cycle has been dominated by foreign policy issues of late. However, for rank-and-file GOP House members, the two major topics that are likely to determine whether they hold onto their seats are likely to be healthcare and ‘affordability’, the latter covering a broad range of cost-of-living issues ranging from housing costs to food prices to energy bills.
• The passing of Rep. Doug LaMalfa (US: Majority Whip Confirms Death Of GOP California Rep. LaMalfa) leaves Speaker Mike Johnson (R-LA) in a very difficult legislative position. The GOP now holds a 218-213 majority. Rep. Thomas Massie (R-KY) is a consistent opponent of the House leadership (resulting in Trump backing his primary opponent), while Rep. Jim Baird (R-IN) has been hospitalised in a car accident. Without these two votes, Johnson will not be able to pass any legislation if all Democrats are in attendance.