The Fed’s Minutes

The Federal Reserve just released the minutes from their meeting three weeks ago. The Fed passed on raising interest rates, but is considering it soon.

Here’s Jon Hilsenrath at the WSJ:

Federal Reserve officials were leaning against raising short-term interest rates at their April policy meeting when they last gathered to consider the outlook for monetary policy, minutes from the Fed’s March meeting show.

They expected headwinds to the economy to subside only slowly and didn’t want to appear to be in a rush to push U.S. interest rates higher.

“A number of participants judged that the headwinds restraining growth and holding down the neutral rate of interest were likely to subside only slowly,” the Fed said in the minutes. “In light of this expectation and their assessment of the risks to the economic outlook, several expressed the view that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate.”

It wasn’t a unanimous view. Some officials said they might want to raise rates as soon as April “if the incoming economic data remained consistent with their expectations for moderate growth in output, further strengthening of the labor market, and inflation rising to 2% over the medium term.”

Here are the minutes.

The Fed minutes are an exercise in indefinite pronouns; some said this, many said that, a few believe x. In today’s Fed minutes, I counted the word “somewhat” 14 times.

The Fed meets again in three weeks. The futures market thinks there’s a 5% chance of a rate hike.

Posted by on April 6th, 2016 at 2:22 pm


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