There is a reason the first three letters are "CON" you know.

Speaker Johnson said just three months ago there would be no Christmas omnibus/CR bill.  That they'd extend through the election break to get the work done and pass the actual appropriations bills.

That didn't happen, and rather than enforce the appropriate penalty (shut it down until Congress passes said bills) he is now going to once again do what he said he never would.

This, on the back of record deficit months for both October and November, which at present run rates would roughly triple the annual deficit from last year.  That won't happen mostly because if they actually try to do that we will not make it to September before the Treasury market blows up and both short and long rates are well into double digits -- being that such a deficit would result in a roughly 15% inflation rate and quite-clearly imply that Congress has no intention of getting the situation under control -- not then, and not ever.

This, by the way, is precisely the last check and balance that can be imposed on a runaway Congress when it comes to spending, which is the reason that folks such as Bill Still who advocate for issuing non-debt-backed notes are wrong.  You need only look to the actions of Congress to recognize that removing that one last check and balance would leave as the only available remaining option the violent removal of said Congress by the people -- in other words, Revolution.  A real one, not a rhetorical one.  That's bad, so let's leave the only remaining means of imposing discipline which is both peaceful and lawful in place.

Anyone who believes that actual inflation in terms of all items less food and energy is only up 3.3%, and all items including same is up 2.7% annually as of the last report as you experience it is out of their mind.  Services, less energy services, which is the vast majority of the economy, is reported up 4.6% -- functionally, that might as well be 5% and is above the current 13 week bill rate AND the 10 year note rate.

In other words the idea that you are actually paying to borrow is false; the borrowing rate is below the inflation rate so we still have Congress driving a speculative bubble rather than incentivizing production and innovation, which is what sustains an economy (and the people in it) over time.

Car insurance continues to be on a tear posting a 12.7% annualized rate.  Anyone who has renewed (or will) can speak to that being the case too.  Oh, and if you like eggs (and you should; they're delicious) they're up a stunning 37.5% annualized on a retail basis and if you've bought them recently you may well have seen a double.

Many have tried to claim we can "grow out of the inflation"; Trump, among others (including his nominee for Treasury) has peddled this nonsense.  Nope.  We never really did it in the 1980s after the Nixon and Carter years; instead women went to work and added another income to the household.  That was a one-shot deal, of course and were we to try to grow out of the double in grocery prices not only would it require actual productivity and growth rates never seen in America outside of the years immediately WWII after the war had blown up basically all production in Europe but in addition you can't have any recessions and you must immediately cease all deficit spending -- which the last two months have already voided as a possibility.

The President is one person and does not set spending levels; he, and his people, file a proposed budget (and "DOGE" can influence that of course) but it is Congress that, per the Constitution, must appropriate every single dollar that the government spends.

Therefore this issue begins and ends there with the President being able to sign or veto said bills -- but that's it.  In addition during the last time of "big mess" (anyone younger than 60 or so doesn't remember it and how bad it got because they were either of single digit age or not born yet) brought us the 1974 Budget and Impoundment Control Act which prohibits the President and Treasury from refusing to spend what Congress has appropriated.  The law was passed after Nixon in fact refused to spend appropriated funds in an attempt to control the deficit.

We still have plenty of people who believe this issue mostly resides in the Executive and decisions made there but in fact it does not; as the Constitution calls for, and the 1974 law restated and enforced, a President's power in regard to spending levels is advisory and ends with his right to issue an original veto.  If overridden, or if he signs an appropriations bill he is bound by said levels of spending as it directs.

It certainly would appear, from the last two months MTS, that coming into the new Trump Administration we're in for a rough ride -- and that is very likely to bear -- no pun intended -- the asset markets.