US: FOMC Minutes

Wed Jan 06 13:00:00 CST 2016

Last month's rate liftoff wasn't a slam dunk after all. The vote may have been unanimous but some at the meeting said it was a close call. Inflation remains a trouble spot and though nearly all of the 17 participants were reasonably confident that it would move back to 2 percent, some said risks remain considerable. Their outlook on employment was positive with most expecting this year's unemployment rate to remain below its long-run level. Policy makers are still data dependent, pointing to a gradual tightening while adjusting to economic conditions. What's missing in the minutes, however, is emphasis on the global economy, specifically slowing in China, which has returned to haunt the markets. The Dow is showing little initial reaction, holding near session lows.

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