FOMC Minutes
The bold sections below were jumped on by the media. Headlines such as "Most members thought rate hike end was 'near'" were rampant. The markets went on a "fearless" bounce to the upside.
The statement "Several members were concerned that market participants might not fully appreciate the extent to which future policy action will depend on incoming economic data, especially when an end to the tightening process seems likely to be near." was completely misconstrued by the media and markets.
The bold highlight of "future policy action will depend on incoming economic data" is reiterated in the statement ""The need for further policy firming would be determined by the implications of incoming information for future activity and inflation."
"Seems likely to be near" and is near are two different things. And "might not fully appreciate" preceeding "seems likely" indicates that if economic data is to the upside, there may be a very nasty surprise in store for the market place. Nevertheless, the band played on.
Labor market indicators signaled a further tightening of labor market conditions.
Higher energy prices still seemed to be passing through to the prices of a number of core intermediate materials...
Policy expectations and yields on Treasury coupon securities subsequently firmed, on net... as incoming data indicated robust economic growth in the United States.
Several meeting participants observed that... historical patterns and recent data suggested that current levels of labor and product market resource utilization were in a zone consistent with little or no remaining economic slack.
...meeting participants generally remained concerned about the risk that possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, could add to inflation pressures.
Most members thought that the end of the tightening process was likely to be near, and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy.
Several members were concerned that market participants might not fully appreciate the extent to which future policy action will depend on incoming economic data, especially when an end to the tightening process seems likely to be near.Full Minutes
The statement "Several members were concerned that market participants might not fully appreciate the extent to which future policy action will depend on incoming economic data, especially when an end to the tightening process seems likely to be near." was completely misconstrued by the media and markets.
The bold highlight of "future policy action will depend on incoming economic data" is reiterated in the statement ""The need for further policy firming would be determined by the implications of incoming information for future activity and inflation."
"Seems likely to be near" and is near are two different things. And "might not fully appreciate" preceeding "seems likely" indicates that if economic data is to the upside, there may be a very nasty surprise in store for the market place. Nevertheless, the band played on.
Labor market indicators signaled a further tightening of labor market conditions.
Higher energy prices still seemed to be passing through to the prices of a number of core intermediate materials...
Policy expectations and yields on Treasury coupon securities subsequently firmed, on net... as incoming data indicated robust economic growth in the United States.
Several meeting participants observed that... historical patterns and recent data suggested that current levels of labor and product market resource utilization were in a zone consistent with little or no remaining economic slack.
...meeting participants generally remained concerned about the risk that possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, could add to inflation pressures.
Most members thought that the end of the tightening process was likely to be near, and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy.
Several members were concerned that market participants might not fully appreciate the extent to which future policy action will depend on incoming economic data, especially when an end to the tightening process seems likely to be near.Full Minutes
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