At 1800 GMT, it’s central bank minutes MKII as the Fed opens up the aviary.
We get another chance to see a shift in central bank rhetoric tonight as the FOMC release their minutes from the July 30 meeting. Once again the market will be looking for Yellen to change her tune but it’s a chance to see if the underlings have raised their voices.
Charles Plosser is one of the biggest hawks on the board and we’ll get a chance to see whether he is now leading the hawk pack or still mainly out on his own. Then on the other side we have members like Kocherlakota who says that the Fed is still a long way off from target. As is the case now the focus will be on the amount of slack and wage growth and the market will be itching for any clues of “lift off” in rates.
St Louis Fed president James Bullard was out last week saying the debate is raging on the subject but whether we’ll hear about it tonight is unknown.
Our good pals at EFX have saved me the trouble of manually knocking together the views of some of the market players and the overall consensus is that we’re unlikely to be any closer to knowing “lift off” than we are now. Well worth a read to get an over picture of sentiment. As always the devil is in the details and we’ll await the minutes with baited breath.
Watch for the market to react to the minutes tonight and then use that to position themselves ahead of the Jackson Hole speeches.
It might be worth fading any large moves on a dovish set of minutes and then taking profit on a hawkish expectant run up to the Hole.
