Highlights of the minutes of the July 29-30 FOMC minutes:
- Many Fed officials still see labor market far from normal
- Most saw downside inflation risks as diminished
- Most Fed policymakers wanted more evidence before changing rate hike views, some felt “relatively prompt” move warranted
- Many FOMC members felt characterization of “significant” labor market slack may have to change before long
- FOMC members differed on degree of remaining slack in labor market
- Most participants supported reducing or ending portfolio reinvestments after first rate hike, don’t want to sell MBS
- Fed policymakers agreed interest on excess reserves would be main tool to move Fed funds rate
It’s hawkish and USD/JPY broke higher but you have to be worried about Yellen being dovish on Friday.