Lots of detailed discussion of slowing the pace of balance sheet run-off. The first step will be to cut the pace by half -- and it sounds like it could come really soon. It'll just be Treasuries (for MBS, actual run-off is already well below the current monthly cap). Lots of concern that a replay of 2019's havoc in funding markets must be avoided. Rate cuts this year seem certain -- but with all the usual caveats about disinflation needing to continue.
FOMC Minutes
FOMC Minutes
Wednesday, February 21, 2024
Sigh. All the evidence from statistics and contacts cited in the minutes is that inflation has been slain. But all the decision-weight is on the vague fear that all of a sudden it will surge higher. What markets want to know is what evidence, and how much of it, the Fed will need to be confident enough to cut rates -- but there's literally not a word about that here. But we can cling to this: "A few participants mentioned the possibility that economic activity could surprise to the upside and inflation to the downside..." And it's official that at the very next meeting they'll start the discussion about when to end balance-sheet run-off.
FOMC Minutes
Wednesday, January 3, 2024
So much for the lie that rate cuts were not discussed at the December FOMC. The minutes are unambiguous that the lowered projections for the funds target, showing cuts in the three coming years, were explained by participants as based on "improvements in their inflation outlooks," subject to "an unusually elevated degree of uncertainty."
But the best part of the December meeting minutes is the discussion of the contracting money supply and the deflation that will likely follow. Wait. Never mind. They didn't mention that.
FOMC Minutes
Wednesday, November 22, 2023
The Fed released the November minutes a day early... they wouldn't want people leaving early for Thanksgiving to miss a more muddled than usual meditation on inflation and the economy. But there's a message in the muddle: their tired model of growth causing inflation is self-evidently broken. The time is near for a conceptual reckoning, and in that environment any further hikes are simply impossible.
FOMC Minutes
Wednesday, October 11, 2023
The Committee decided that the upside risk to their dour economic projections is that "the unexpected resilience that the economy has demonstrated so far could persist." In other words, their projections have been wrong so far and the thing that could make them wrong in the future is if they continue to be wrong in the future. We're beginning to think these people are something less than geniuses.
FOMC Minutes
Wednesday, August 16, 2023
"A couple" of participants supported no hike in July. Full agreement that that monetary policy is "in restrictive territory," with "a number" worried about weighing the "risks of an inadvertent overtightening" against the "cost of an insufficient tightening." And out of 6,977 words -- not a single one dealing with the money supply.
FOMC Minutes
Wednesday, July 5, 2023
You’ve heard of the two-handed economist? Based on these minutes, we’ve got a 17-handed economist running things. Everyone said every possible thing about every possible side of every possible issue. No wonder they did nothing. But we need an 18th hand, apparently. In almost 7 thousand words, not one – not one – mentioned the first-ever year-on-year decline in the money supply. So they talked about everything that doesn’t matter, and neglected the one thing that does.
FOMC Minutes
Wednesday, May 24, 2023
They're data-dependent -- which means the inflation emergency is provisionally over, and the usual cost-benefit relationships are important again. We take that as meaning: no more rate hikes. The baseline assumption is for a recession starting right now -- and then (you guessed it) inflation exactly at target by 2025. By the way, the word "deflation" doesn't make it into our Page One word-cloud. That's because the word doesn't appear even once in the 4,584 total words in the minutes. Oh. And the US banking system is sound and resilient.
FOMC Minutes
Wednesday, April 12, 2023
Now featuring a "word cloud" (see if you can guess which word comes up biggest, and which does not)!
The Fed staff is now officially expecting a "mild recession" later this year. The Committee acknowledged new risks and uncertainties thanks to the banking crisis -- but all that did was keep what was going to be a 50 bp rate hike at only 25 bp.
FOMC Minutes
Wednesday, February 22, 2023
Yes, yes, the big non-news is that almost all participants favored a 25 bp rate hike (but we knew that, because they made a 25 bp rate hike). Sadly, in this psychedelic mishmash of confused, confusing and self-contradictory deliberations and improvisations, they continue to insist that "a period of below-trend growth in real GDP would be needed to bring aggregate demand into better balance with aggregate supply and thereby reduce inflationary pressures." Then what do we make of it that they admit, here in writing, that "to the extent national unemployment increases, historical evidence indicates that even larger increases in the unemployment rate for some demographic groups -- particularly African Americans and Hispanics -- would be likely to occur"? Having made this admission, how can they possibly cause this to happen and hope to survive politically?