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.