FOMC minutes will kick off the next round of fedwatching
The FOMC minutes for the May 2-3 FOMC meeting are due on Wednesday at 2 pm ET (1800 GMT).
The statement wasn't a big market mover but it had a few highlights. Officials said household spending rose modestly, which was a bit of a surprise given some warning signs on that front (and since)
"Household spending rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid," the statement said.
That brand of optimism has been a hallmark of the Fed in the past two months. Whenever there is bad news, they find a slice of good news as a signal that it's going to get better. The statement also said that weak Q1 was likely to be transitory.
More-recently, the tone is beginning to shift. Data on inflation has been disappointing and that's got the attention of some policymakers. The consumer also continues to struggle.
What to look for in the FOMC minutes?
None of those worries had really bubbled up as of May 3, so the Fed is more likely to remain optimistic.
A key to trading the minutes is to remember that they're a snapshot in time but are often treated like a current assessment.
The US dollar has struggled lately and for good reason but the Fed won't know those reasons. So expect the optimistic and hawkish tone to lead to a short-lived pop in the US dollar when the headlines hit on Wednesday.
