Highlights of the FOMC minutes released Nov 18:
- Officials most agreed on gradual accommodation removal
- Members wanted to convey that Dec liftoff may be appropriate
- Most officials said liftoff conditions could be met by Dec
- Members open to liftoff barring unanticipated shocks
- A couple FOMC members worried that language change sent too strong of a Dec signal
- Substantial global oil supply likely to contribute to increase in bankruptcies and restructurings in energy sector
- Note that financial system appeared to weather Sept/Oct financial turbulence without any sign of systemic stress
- Saw downside risks from global economic and financial conditions as having diminished
- The minutes are for the Oct 27-28 meeting
- This was the statement from that meeting
A quick look at the headlines doesn't tell us much we don't already know. If anything, there isn't the hawkish hint that USD bulls were hoping for so there is no reason to buy the US dollar after the Minutes.
At the same time, December is still in play and economic news has been positive since the meeting so the approx. 70% chance of a hike priced into Fed Funds Futures still sounds about right, if not a tad low.
Trading immediately after the Minutes was choppy. The US dollar hit session highs against all the majors except GBP but quickly reversed. A few minutes after the minutes, stocks hit session highs.
