It couldn't be plainer, except that Powell wasn't dovish enough in the July FOMC presser. The "vast majority" of participants think it will be appropriate to cut in September. "Several" said they could have supported a cut right then and there in July. Why? Here's the money quote: "A majority of participants remarked that the risks to the employment goal had increased, and many participants noted that the risks to the inflation goal had decreased. Some participants noted the risk that a further gradual easing in labor market conditions could transition to a more serious deterioration." The only question is whether it's one cut or two in September. The August jobs report will have a lot to do with that, and we'll get further telemetry from Powell at Jackson Hole on Friday.
FOMC Minutes
FOMC Minutes
Wednesday, July 3, 2024
Magnificent Seven investors beware! Capitulation alert! The Fed says disinflation will continue as AI drives productivity gains! But the key passage:is this capitulation on the committee to our view that "the longer-run equilibrium interest rate was higher than previously assessed, in which case both the stance of monetary policy and overall financial conditions may be less restrictive than they might appear."
FOMC Minutes
Wednesday, May 22, 2024
Bless their hearts, as we say in Texas. They are asking the right questions for a change. Is policy truly very restrictive? Is immigration creating a labor supply boom? Is technology creating a productivity boom? The answers: no, yes and yes.
FOMC Minutes
Wednesday, April 10, 2024
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
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.