With the shutdown circus warming up for yet another encore, the Treasury quietly wrapped up the week’s coupon sales, with a $44bn 7-year.

The paper cleared at a 4.018% high yield, breaking back above 4% for the first time since July and marching up from December’s 3.930%. It also managed a modest 0.4bp tail versus the 4.014% When-Issued level—because of course it did—marking the fifth tail in the last six auctions. In short: demand showed up, but only out of a sense of duty, not enthusiasm.

The bid-to-cover ratio didn’t exactly scream enthusiasm either, slipping to 2.454 from December’s 2.509—its weakest showing since September and comfortably below the six-auction average of 2.516. In other words, buyers showed up, but some clearly forgot to bring their excitement.

The internals offered a mild consolation prize. Indirect bidders stepped up, taking 66.9% of the auction, a notable rebound from 59.0% last month and well above the six-auction average of 61.8%. Directs, however, quietly headed for the exits, with allocations falling to 22.2% from 31.6%. That left dealers doing what they do best in these situations: absorbing the leftovers. They were awarded 10.9%, up from 9.3% in December and slightly above the recent average of 10.2%.

Overall, a thoroughly mediocre, tailing auction — not a disaster, not a triumph, just another polite yawn from the bond market. Still, one day it may be remembered fondly, once investors fully accept that the so-called “risk-free” asset has quietly become the riskiest thing in the room.

When fiscal discipline turns into political theater and the dollar into a policy weapon, Treasuries stop being boring and start being adventurous. In that light, this auction wasn’t weak — it was just early to the punchline.

Listen to The Month That It Was in January 2026 from The Macro Butler.

You can now also listen to this podcast on YouTube; Rumble & TikTok.

https://themacrobutler.substack.com/p/the-month-that-it-was-january-2026

The affordability crisis, of course, is a shocking revelation—at least if you live inside the comfortable bubble of the Washington swamp. For everyone else, it’s been obvious for years: inflation isn’t just about demand, shortages, or fading trust in public institutions, but also about governments spending like the credit card has no limit. Unsurprisingly, a new Plasma study shows the fastest-rising cost-of-living cities are a greatest-hits album of policy excellence and fiscal illiteracy: New York City, San Diego, San Francisco, Los Angeles, Seattle, Boston, Philadelphia, San Jose, Chicago, and Baltimore. In other words, the places most eager to lecture the rest of the country on economics are doing a stellar job making daily life unaffordable.

https://www.foxbusiness.com/economy/new-study-shows-cities-where-cost-living-rising-fastest

It’s no coincidence that the most expensive metros read like a roll call of deep-blue governance: higher taxes, thicker regulation, and zoning rules so tight they could pass for rent control cosplay. Studies from Berkeley and BEA data confirm this isn’t a fluke but a 15-year trend—blue states consistently run higher costs across housing, utilities, goods, and services, with housing about 50% pricier and utilities roughly 45% more expensive than in red or purple areas. While every city feels inflation, blue cities feel it harder, thanks to strong demand colliding with policy-engineered housing shortages, environmental mandates, and zoning laws that make building homes harder than passing a budget on time.
https://besi.berkeley.edu/publication/what-drives-high-costs-in-blue-states/

The stark price gap between blue and red or purple states shows how policy-heavy, tightly policed markets can override fundamentals and systematically distort prices.

In a twist that has set Euro-politics buzzing, Germany’s AfD has positioned itself as the lone voice demanding accountability over Nord Stream, arguing that whoever was responsible should pay the bill—an idea that sounds refreshingly old-fashioned in a continent otherwise fluent in finger-pointing and selective amnesia. The party frames its stance as “law and order,” while accusing Europe’s leadership of sacrificing domestic industry and jobs on the altar of geopolitical signalling.

Strip away the theatrics, and the argument boils down to this: German voters foot the energy bill, while Brussels debates values, Kyiv wages war with others money, and no one seems especially eager to explain who blew up the pipeline—or why European taxpayers should quietly absorb the cost.

https://www.rt.com/news/631660-afd-germany-ukraine-enemy/

Ukraine’s wartime messaging has become a masterclass in propaganda : dramatic claims are launched with great urgency, repeated across European podiums, and then quietly retired once verification proves inconvenient. Allegations flare, headlines follow, donations flow—and the evidentiary trail somehow evaporates.

Even U.S. officials have conceded that some of the most cited incidents cannot be independently confirmed, a reminder that in modern conflicts the fog of war pairs nicely with the fog of public relations. In Eurostan, diplomacy was sidelined long ago, escalation is monetized, and information warfare now does as much heavy lifting as tanks—except narratives, unlike facts, never need to be proven to remain useful.


https://www.reuters.com/world/pentagon-cant-independently-confirm-atrocities-ukraines-bucha-official-says-2022-04-04/

The reality is that Ukraine and its corrupt leader is both villain and global puppet theater, with the alphabet agencies pulling strings. Anyone who disagrees is instantly promoted to “an agent of Moscow,” proof that in modern geopolitics, confidence often substitutes for evidence

In the brave new cafeteria of the Great Reset, meat is obsolete, cows are inefficient, and you—being carbon—are the real environmental hazard. Lab-grown protein, generously funded by green zealot billionaires, is rolled out as salvation: no farms, no slaughter, just stainless steel and good intentions. To ease the transition, a friendly internet celebrity tours a $200-million fake-meat factory for millions of kids, assuring them it tastes “just like the real thing” and is officially approved by the Ministry of Food (formerly FDA/USDA). Orwell would call it progress: control the menu, educate the children, and soon the slogan won’t be you will eat bugs—it’ll be you always loved them.

https://youtu.be/X-TaFVPhj2g

In the brave new food pyramid, no one quite knows what lab-grown meat does to humans—but that’s fine, because uncertainty is now a feature, not a bug.
The ‘World Entertainment’ Forum began by saying meat was bad for the planet, then for the climate, then for the water, steadily discovering new sins for cows as needed. Billionaires cheer from the sidelines, urging wealthy nations to “voluntarily” switch to synthetic protein while investing heavily in farmland—pure coincidence, of course. Regulators are still debating what to call this stuff, which is convenient, because if you don’t name it clearly, no one can complain when it shows up on the dinner plate.


https://www3.weforum.org/docs/WEF_White_Paper_Roadmap_Protein.pdf

Best of all, the rollout strategy is classic Orwell: normalize it through children, label dissent as ignorance, and by Agenda 2030 everyone will swear they always preferred meat grown in a vat—because Big Brother knows what’s for dinner.

Welcome to the Ministry of Humanity : OpenAI is reportedly building a “humans-only” social platform where proving you’re human may require Face ID or an Orb that scans your eyeballs—because nothing says authenticity like biometric compliance.

The announcement conveniently coincided with a Worldcoin pump, reminding us that in this brave new internet, humanity is verified by hardware, privacy is optional, and all users are equal—some just more scanned than others.

https://www.forbes.com/sites/annatong/2026/01/28/openai-wants-to-create-biometric-social-network-to-kill-xs-bot-problem/

Fresh off torching “Jerome Too Late,” Donald Copperfield reached into his magic hat and voilà—Kevin Warsh reappeared as the next Fed chair, ready to deliver “independent-in-name-only” monetary policy, complete with a Truth Social prophecy declaring him the greatest ever and “central casting.” Once an inflation hawk, Warsh has since discovered the miraculous virtues of lower rates—just in time for the audition—raising polite concerns that Fed independence may soon be more of a costume than a principle, all while the FOMC still votes, rates stay stubbornly high, and a DOJ probe lurks backstage like an unscheduled encore.

Give it one bad CPI print, half a soft jobs report, or a single day the S&P doesn’t hit a new high. In Truth Social time, that’s a few hours max before “Kevin Too Early” is born—caps lock included, independence revoked, and monetary policy declared tremendously premature.

In today’s episode of “Inflation Is Totally Dead—Trust US Propaganda”, U.S. wholesale prices jumped more than expected in December as companies politely shoved tariff costs straight onto wholesalers. PPI popped 0.5%—its biggest move in three months—while the “don’t worry about food and energy” gauge sprinted ahead at one of the fastest clips of the Jubilee Year, rudely ignoring economists’ soothing forecasts. Services prices surged, especially for machinery dealers discovering inflation is great for business, and while goods prices stayed flat thanks to cheaper energy, the message was clear: inflation didn’t leave, it just went to the gym. With PPI feeding straight into the Fed’s favourite inflation metric, this was less a data point and more a reminder that price pressures aren’t cooling—they’re stretching before the next lap.

Forget the headline inflation bedtime stories—down in the trenches where investors and CFOs actually live, the spread between core CPI and core PPI flipped negative again in December. That’s month two in a row and the worst gap since March 2025, right before the great April tariff tantrum. Translation: costs are sprinting while pricing power is jogging, margins are about to feel the squeeze, and equities may soon discover that valuations, like gravity, still work.

In a nutshell, December’s PPI gut-punched the “inflation is over” fairytale: input costs are sprinting, pricing power is limping, margins are next, and gravity is warming up for equities.

🤵 The Macro Butler Weekly Digest 🤵

🌐 Free markets don’t die in revolutions—they’re quietly conscripted: the Don Roe Doctrine marks the moment capital stops roaming freely and starts serving the state. 🌐

Read more here: https://themacrobutler.substack.com/p/the-don-roe-doctrine-and-the-end