Highlights of the Minutes from the April 26-27 FOMC meeting:

  • Range of views on whether data would support June hike
  • Here is the April 27, 2016 FOMC statement

Big jump in the US dollar on the 'likely' hike talk. S&P 500 drops about 15 points in a flash.

More:

  • Most judged it would likely be appropriate to hike in June if data remains consistent with Q2 GDP pickup, firmer labor market conditions and progress on inflation
  • Some concerned that markets may not have accurately assessed the chance of a June hike
  • Policymakers expressed a range of opinions on whether there would be enough incoming data before June 15 meeting to warrant a hike
  • Some judged outlook as now roughly balanced, many others continued to see downside risks
  • Few saw it as appropriate to hike in April, two worried that US behind the curve on inflation
  • May expressed confidence that US growth would pick up in coming quarters but some saw risk that a more persistent slowdown underway
  • Generally saw risks from global and financial developments as having diminished but still warranted close monitoring
  • Risks to the projection for inflation were still judged as weighted to the downside, reflecting the possibility that longer-term inflation expectations may have edged down
  • Some participants noted that global financial markets could be sensitive to the upcoming British referendum on membership in the European Union or to unanticipated developments associated with China's management of its exchange rate.
  • Full text of the FOMC Minutes.

Looking through the full text of the Minutes, the headline might be a bit more hawkish than what's written down.

For these reasons, participants generally saw maintaining the target range for the federal funds rate at 1/4 to 1/2 percent at this meeting and continuing to assess developments carefully as consistent with setting policy in a data-dependent manner and as leaving open the possibility of an increase in the federal funds rate at the June FOMC meeting.

And this:

Participants agreed that their ongoing assessments of the data and other incoming information, as well as the implications for the outlook, would determine the timing and pace of future adjustments to the stance of monetary policy. Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee's 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June. Participants expressed a range of views about the likelihood that incoming information would make it appropriate to adjust the stance of policy at the time of the next meeting. Several participants were concerned that the incoming information might not provide sufficiently clear signals to determine by mid-June whether an increase in the target range for the federal funds rate would be warranted. Some participants expressed more confidence that incoming data would prove broadly consistent with economic conditions that would make an increase in the target range in June appropriate. Some participants were concerned that market participants may not have properly assessed the likelihood of an increase in the target range at the June meeting, and they emphasized the importance of communicating clearly over the intermeeting period how the Committee intends to respond to economic and financial developments.

There are a lot of qualifiers there 'most', 'some', 'several', and 'likely'. Still, the market had thought the chance of a June hike was dead-and-buried but it's definitely back on the table now. It all makes the speeches from Dudley and Fischer tomorrow huge.