A powerful winter storm has put a halt to normal winter activities as much of the Southeast and Northeast of the U.S. are deep under snow this weekend. More than 8500 flights have been canceled, thousands of homes and businesses are without power, and motorists are stranded on the roads from Nashville, TN to Boston, MA. We got about 12 inches of snow here in Hendersonville, NC but are fortunate to still have power. Despite the bad weather, the volatility in the financial markets continue to persist. Fed officials are expected to “stick to their guns” this upcoming week and repeat their confidence in the underlying fundamentals of the economy. They are not likely to raise rates this month but they are most certain to repeat that the risks to the outlook are balanced and additional rate hikes remain on the table. The financial markets are not in agreement as evidenced by recent declines in bond yields across the curve as both domestic and world investors find our UST notes and bonds attractively priced. Chair Yellen is set to testify before Congress on February 10-11 and she can’t duck the question about how the market turned sour after last month’s rate hike. The 2-3 year range has only minimal market risk and is a good hedge to the overnight rate.