These should be the most interesting FOMC minutes in a long time based on the Wall Street Journal article several weeks ago which highlighted the unusually large number of participants (7 of 17) who took issue with the Fed dipping its toe back into the quantitative easing waters.
From a policy perspective, Bernanke laid out several alternatives at Jackson Hole, so that will be the most likely course for the Fed to follow going forward, but from a soap opera perspective, today’s minutes will be the most interesting in terms of the internal debates taking place within the FOMC in some time.
Bernanke was able to herd the cats last time (only Hoenig dissented) but we’ll have to read the minutes closely to see if there is a wider rift (or rifts) developing within the Federal Reserve Board.
If it turns out that there is a hawkish wing of the FOMC coalescing to oppose QE, that is a potential dollar plus from a yield perspective but a negative from an asset market perspective. Stocks won’t like it.
