Sometimes there is no point in searching for hidden meanings.
The FOMC minutes released today of the April 30th meeting contained no new information on any of the topics that concern traders.
There was no mention on the likely date of first Fed Funds rate hike. Ms Yellen's original formula of six months after the end of quantitative easing ends, at current pace this December, is long forgotten. Nor were there any hints about the pace of a new rate cycle whenever it begins.
The Fed’s ‘exit strategy' from its current accommodative monetary policy was discussed but only as "prudent planning”, not as an indication that a policy change is being considered.
The slowdown in the housing sector was noted. Several members worried that it could be durable.
The Fed made no changes to its medium or long term economic forecasts and continued to see the weak growth in the first quarter, 0.1 percent and expected to become negative upon revision, as a result to winter weather, though it did reduce the mentions of weather from 15 in the last minutes to 8. The Fed's economic forecast over the past several years have been consistently over optimistic.
Labor market research was discussed with several members arguing that the unemployment rate does not register total labor market slack. Wage growth, import price and commodity prices were noted to be soft. Inflation was expected to require yet few more years to reach 2.0 percent.
Federal Reserve policy since the financial crisis has been effective at disaster prevention and ineffective at creating a healthy economy. Nothing has changed. The Fed has no new ideas on economic growth, job creation or inflation.
Today's Fed minutes were nothing but a refresher course in that five year old curriculum.
Chief Market Strategist
WorldWideMarkets Online Trading