What were the topics at the March 20-21 meeting?
The FOMC minutes can sometimes roil markets but usually they’re overhyped and the trade is to fade any move.
Eamonn had some preview earlier:
Preview via ANZ:
- The FOMC
meeting last month unveiled a quite hawkish Fed, as the Committee was
just one official away from signalling a consensus to hike every quarter
(according to the dot plot)
- The minutes will likely provide more evidence of this upbeat, more hawkish Fed narrative and headlines may ultimately provide another leg of support to the USD
addition to raising the policy rate 25bp to a range of 1.50-1.75%, the
FOMC presented a much more optimistic outlook for the economy in its
March Summary of Economic Projections (SEP).
- we believe FOMC participants continue to underestimate the frontloaded nature of recent changes in US fiscal policy
the recent press conference, Chair Powell said that “participants
believe there will be meaningful increases in demand from the new fiscal
policies for at least the next let’s say three years.” However, we
expect that the impact will be far more concentrated in H2 2018 and H1
2019. In the minutes, we expect more clarity indicating what the participants are assuming for the spend-out rate of the fiscal boost.