On balance, the Fed minutes look dovish, as usual. They seem to want to create a bit of ambiguity over the “extended period” language, saying it doesn’t not mean 6-months before the next move. That said, low rates could last quite some time, according to the minutes.

Both GDP and inflation forecasts were revised lower. Here is the relevant staff discussion:

Staff Economic Outlook
In the forecast prepared for the March FOMC meeting, the staff’s outlook for real economic activity was broadly similar to that at the time of the January meeting. In particular, the staff continued to anticipate a moderate pace of economic recovery over the next two years, reflecting the accommodative stance of monetary policy and a further diminution of the factors that had weighed on spending and production since the onset of the financial crisis. The staff did make modest downward adjustments to its projections for real GDP growth in response to unfavorable news on housing activity, unexpectedly weak spending by state and local governments, and a substantial reduction in the estimated level of household income in the second half of 2009. The staff’s forecast for the unemployment rate at the end of 2011 was about the same as in its previous projection.

Recent data on consumer prices and unit labor costs led the staff to revise down slightly its projection for core PCE price inflation for 2010 and 2011; as before, core inflation was projected to be quite subdued at rates below last year’s pace. Although increased oil prices had boosted overall inflation over recent months, the staff anticipated that consumer prices for energy would increase more slowly going forward, consistent with quotes on oil futures contracts. Consequently, total PCE price inflation was projected to run a little above core inflation this year and then edge down to the same rate as core inflation in 2011.

Bottom line: The Fed wants some flexibility on how the market interprets the “extended period” language but does not intend to use it, judging by the dovish tone of the minutes.

Sounds like Greece and its IMF package.