US: FOMC Minutes

Wed Nov 22 13:00:00 CST 2017

It was a unanimous vote to hold rates unchanged at the last FOMC meeting but debate over inflation was lively. The hawks, citing the risk of wage push in a full employment economy, warned that the low rate of inflation could prove transitory and that a rate hike in the near term would be appropriate. But the doves warned that the weak rate of inflation could further lower inflation expectations and make the attainment of the Fed's 2 percent inflation goal more difficult. They argued that a rate hike should be deferred until inflation actually begins to pick up.

Members at the meeting, held on October 31 and November 1, agreed to keep rates unchanged and confirmed that future hikes would be dependent on the strength of economic data. And the data since the meeting, led by the October employment and industrial production reports, have been very strong and point squarely at this year's third rate hike, at the December FOMC.

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