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Rates Decline After Flynn Plea

Yields dropped Friday as news broke that former national security adviser Michael Flynn pled guilty to charges of lying to federal agents.  The 10-year UST note was lower by 10 bps at one point during the morning, and ended up leaving rates nearly unchanged for the week.  That news stole the market's attention from the ongoing effort to move a tax bill through Congress.  While expectations were riding high earlier in the week, the concerns of three GOP senators about the bill's anticipated expansion of federal deficits moderated that enthusiasm on Thursday and Friday. 

On the monetary policy front, President Trump had the opportunity to add yet another member to the Federal Reserve's Board of Governors as Janet Yellen indicated that she would step down from her seat once Chairman Powell is sworn in.  Her spot will be filled by Marvin Goodfriend, a professor and former Richmond Fed economist and would still leave three additional Federal Reserve Governor openings.  

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