All eyes were on last Thursday’s Consumer Price Index (CPI) report which registered a 0.1% decline in December.  While seemingly small, markets reacted positively to the decline as it abates the upward pressure that has been on components of the CPI.  This was the first monthly decline in two and a half years!  In a win for market analysts, the report matched expectations exactly.  Also reported on Thursday were unemployment claims falling 1,000 and continuing claims declining 63,000.  The jobs market remains strong, and inflation elevated, which should leave the Federal Reserve plenty motivated the keep monetary conditions on a tightening path.  Soon after the reports, the Bloomberg World Interest Rates Probabilities (WIRP) data showed traders pricing in a 25 bps hike at the next committee meeting.  Correspondent to the data, Federal Reserve Bank of Philadelphia President Patrick Harker said that “(He) expect(s) that we will raise rates a few more times this year, though, to my mind, the days of us raising them 75 basis points at a time have surely passed…and in my view, hikes of 25 basis points will be appropriate going forward.” On all this, Treasury yields eased for the week.  Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: January Empire Manufacturing (-8.7, -11.2); Wednesday: January 13 MBA Mortgage Applications (N/A, 1.2%), December Retail Sales Advance MoM (-0.8%, -0.6%), December PPI Final Demand (-0.1%, 0.3%) and December Industrial Production MoM (-0.1%, -0.2%); Thursday: January 14 Initial Jobless Claims (215k, 205k) and December Housing Starts (1,358k, 1,427k); Friday: December Existing Home Sales (3.95m, 4.09m).