Federal Open Market Committee August monetary policy minutes are due today

TD are warning they may be market moving:

  • the minutes of the August FOMC meeting ... may actually be more market relevant

(than Powell's Friday appearance at Jackson Hole)

  • if participants detail possible changes to the Fed's interest rate or balance sheet policy over the next year or so.

There are a number of issues of interest to market participants that Fed officials may address in the minutes, including:

  • risks to the outlook,
  • how much inflation overshooting the FOMC expects (and would tolerate),
  • whether (and how much) to hike beyond neutral,
  • how the Fed reacts to an inverted yield curve,
  • and potential changes to the operational framework for policy

More:

  • the risk for markets is to learn on Wednesday that the Committee had substantive discussions about changes to balance sheet policy, including ending the runoff program earlier than the market consensus, or preparing for a possible shift to a corridor system for interest rate determination from the current floor system - and then Powell elaborates on those potential changes to the policy framework in his speech Friday morning.
  • Thus, while not technically "new," as they would have already been debated by the full set of FOMC participants and reported in the minutes on Wednesday afternoon, the market would have had only a limited amount of time to digest this policy debate before Powell discussed further. We cannot rule out this possibility.

TD giving a heads up they expect the minutes could be quite significant indeed

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Earlier previews can be found here: