Whether they reveal anything new or just nuance, the minutes from the Fed’s last meeting will be a major highlight of the trading week when they are released Wednesday afternoon.
Traders are watching to see if the minutes take on a more hawkish tone, particularly after Fed Chair Janet Yellen said during her March 19 press briefing that the Fed could start raising short-term interest rates about six months after ending its bond-buying program, expected in the fall.
“I think that was a mistake,” said Stephen Stanley, chief economist at Pierpont Securities. Since that comment, some traders have taken it as a misstep by the new Fed chair, and Fed officials have been vague about the timing of their move away from a zero fed funds rate. But the remark did initially jar markets, and immediately sent stocks lower, and bond yields and the dollar higher.
Stanley said he will be most interested in the views of the Federal Open Market Committee members on the changes in the actual language change in the statement.
“For me, I think the most interesting potential news item in the minutes will be the recap of the discussion of the changes in forward guidance,” he said. “I’m interested to see if there was any dissent or varying opinions about the lower for longer statement … was there a contingent of folks that were uncomfortable with the piece of the statement that said they would keep rates well below normal for a long time even after they start to raise them?”
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