US: FOMC Minutes

Wed Aug 19 12:42:00 CDT 2015

Back in July, almost all FOMC voters agreed that greater employment growth and stronger inflation readings were needed to justify its pending rate liftoff. But one hawk was ready to hike right away and others believed the necessary conditions for liftoff would be met shortly. On the dovish side, some members noted they had not yet seen evidence that inflation would move to the Fed's 2 percent policy target. China, a dovish wildcard, was mentioned as a concern by several members back in July which, of course, was before last week's yuan devaluation. The minutes did not offer any clues on the addition of the word "some" when describing the necessity for further economic improvement. There's not much immediate reaction to the minutes which appear to be balanced, keeping uncertain whether liftoff begins in September or December. Note that today's minutes were released ahead of the 2:00 p.m. ET schedule.

The Federal Open Market Committee issues minutes of its meetings with a lag. The minutes of the previous meeting are reported three weeks after the meeting.

The FOMC has changed dramatically in the transparency of its operations. It now discloses policy changes at the end of each meeting. Historically, the Fed used to keep investors guessing about policy changes and Fed officials did not appear on the speaking circuit as frequently as they do now.

Since the Fed moved up the release of the minutes to three weeks after a meeting from six in January 2005, the minutes have become a market mover as analysts parse each word looking for clues to policy. However, the minutes do include the complete economic analysis compiled by Fed officials and whether or not any FOMC members have voiced opinions at odds with the rest of the group.

Investors who want a more detailed description of Fed opinions will generally read the minutes closely. However, the Fed discloses its official view at the end of each FOMC meeting with a public statement. Fed officials make numerous speeches, which freely give their views to the public at large.

Eight times a year