The Minutes were dovish but they're three weeks old
The US dollar got scorched after the FOMC minutes but the commentary in the report fits in with the general tone at the time as the US dollar was screaming higher.
Since then -- and especially since the strong January non-farm payrolls report -- officials have started to dismiss some of the worries and put a June hike on the table. The Fed's Lockhart said on Feb 12 weakness on inflation and wages was a concern but also said all rate rise options from June onward should be on the table.
The FOMC Minutes are often interpreted on the knee-jerk reaction as a reflection of the current situation but it's really a look three weeks into the past. At the time, oil prices were 17% below where they are now, yields/breakevens were lower.
The main event next week is Tuesday's testimony from Yellen at Humphrey Hawkins and it's still likely she will signal that 'patient' will be removed. That makes this US dollar dip a buying opportunity.
For reference on how the markets have reacted, the Fed fund futures market now implies only a 54% chance of a hike in June, compared to 64% before.
