After a barely perceptible reaction to today's ISM Non-Manufacturing Index, tomorrow's lack of economic data is perhaps not-so-important. The pace of the morning will most likely be set by overnight events in Europe, but heading into the afternoon we get several Fed-related calendar items. There's the standard "Fed-Speak" which includes Chuck Evans at 1115am and John Williams at 4pm. Between those two speakers is the release of the Beige Book which is a collection of data from all the Fed Districts that act as the economic Cliff's Notes for the upcoming 2-day Fed Meeting on 9/20 - 9/21. Early tomorrow AM, we'll get MBA Mortgage Apps, as always. For a more detailed look at economic events for the entire week, see MND's Week Ahead:

(Reuters) - The jobs package that U.S. President Barack Obama will unveil this week will have a "direct, quick and positive impact" on the economy and job creation, the White House said on Tuesday. "We need to do things that will have a direct impact in the short-term to grow the economy and create jobs and the president will put forward proposals that will do just that," White House spokesman Jay Carney told a news briefing. Obama will present his jobs plan to a joint session of Congress on Thursday evening. (Reporting by Laura MacInnis and Alister Bull; Editing by Eric Beech)

This "alert" effectively unwinds the previous chances of reprices for the worse. MBS turned a corner after hitting their lows for the 2nd time and are back in line with the middle of their ranges (and have held it long enough so as to not seem too fleeting). 10yr yields made it as high as 1.99 but probably won't break 2% unless S&P's get closer to 1160. MBS proved themselves to be disconnected enough from TSYs that even a break of 2% in 10's might not be cause for alarm. Spreads have gotten wide enough in general that minor sell-off's in TSYs won't always necessitate minor sell-off's in MBS. Fannie 3.5's are up 3 ticks on the day at 101-24 and 4.0's are up 4 ticks at 104-16.

(Reuters) - A top Federal Reserve official who opposed the U.S. central bank's move last month to ease monetary policy signaled Tuesday he may balk again if fellow policymakers opt for still more stimulus this month. "The data in August did not justify the additional accommodation provided at that meeting," Minneapolis Federal Reserve Bank President Narayana Kocherlakota said in remarks prepared for delivery at the University of Minnesota's Carlson School of Management. "It is unlikely that the data in September will warrant adding still more accommodation." Kocherlakota was one of three Fed policymakers to dissent on the Fed's August decision to keep interest rates low until mid-2013. On Tuesday, he said that extending the Fed's low-rate promise last month was "inconsistent" with the Fed's commitment to keeping inflation at or a bit below 2 percent. Given that inflation has risen and unemployment has dropped since the last time the Fed eased policy, he argued, the central bank should stand pat on policy, or possibly even tighten it. Now that the Fed has made its new low-rate commitment, Kocherlakota said, it will be "nearly impossible to undo in the near term" and reiterated he would not push fellow members of the policy-setting Federal Open Market Committee to do so. He did, however, suggest he would oppose doing more. "I assess FOMC actions in light of the incoming data and the Committee's communicated objective of keeping inflation at 2 percent or a bit under," he said. While unemployment, at 9.1 percent in August, remains "disturbingly high," the Fed could not have cut it further without pushing inflation up above 2 percent over several years. Doing so, he said, would undermine the Fed's credibility, and hurt future efforts to keep inflation under control.

(Reporting by David Bailey, Writing by Ann Saphir, Editing by Chizu Nomiyama)

Fannie 4.0's just hit their lows of the day for the 2nd time this half hour. It's possible that we'll see a few of the "early" lenders reprice for the worse here depending on when they released rates this morning and how aggressively. 4.0's are down 1 tick on the day at 104-12 but 3.5's are still up 1 tick at 101-22. 10yr notes are almost 1 bp lower than Friday's latest levels at 1.9857. Possible reprices yes, but "big scary sell-off," no.

(Reuters) - Further monetary stimulus from the Federal Reserve would fuel inflation without doing much to lower unemployment, one of the central bank's most inflation-focused hawks told the Financial Times. "My sense is that more monetary stimulus at this point would likely show up almost entirely in higher inflation with very little constructive influence on growth," Jeffrey Lacker, president of the Richmond Federal Reserve Bank, said in an interview published on the paper's website on Monday. Lacker spoke before the August jobs report, published Friday, showing U.S. employers added no new jobs last month, the newspaper said. The data is likely to bolster the case among Fed officials for further monetary easing. The Fed is confronting an economic recovery that appears to be stalling, and policymakers will debate options to spur growth at a meeting Sept. 20-21. Fed Chairman Ben Bernanke's decision in late August to extend the meeting to two days from one signaled that concern about the outlook was already heightened. Fed officials are divided over the need for more stimulus, and Lacker, who is not a voter this year on the rate-setting Federal Open Market Committee, signaled he was among those who opposed measures such as replacing short-term securities with longer-term bonds on the Fed's balance sheet in a bid to drive down longer-term interest rates.