Highlights of the FOMC minutes:
- Several officials wanted ‘clear presumption’ in favor of $10 billion cuts to bond buying at each meeting
- A number of officials said tapering plan should be adjusted if economy substantially deviated from expectations
- Participants stressed it would soon be appropriate to change forward guidance on the first rate rise
- Market expectations for QE and rate rises well aligned with Fed view
- Some participants wanted to statement on goals to explicitly say below-target inflation is as undesirable as above-target inflation
The US dollar likes the minutes. The market isn’t overly excited about the change in guidance because it’s inevitable as unemployment hits 6.5%. The presumption of a taper reiterates what several Fed members have said — the bar is very high for changing the pace of the taper.
