FOMC Minutes Show Fed Hiking “Soon” But Willing To Allow Dovish Inflation Overshoot
by Tyler Durden
ZeroHedge.com
Wed, 05/23/2018
The big question after the May FOMC statement was “how symmetric is The Fed’s reaction function” to inflationary upside, i.e. how much will the Fed allow inflation to overshoot, and how much attention are they really paying to the collapsing yield curve? And as Bloomberg noted, a key focal point of the minutes will be to further distinguish the main thresholds separating the three- and four-hike camps in the 2018 dot plot.
Former fund manager Richard Breslow wrote in his Trader’s Notes column earlier:
“I expect there is a decent chance that the FOMC minutes we’re going to see this afternoon read on the hawkish side. What a difference a few weeks make. Way back then Fed-speak was clearly trending to the upbeat side and they were getting even more hopeful on the inflation side of the dual-mandate.”
But it appears The Fed walked the tightrope on “symmetry” by showing a hawkish tilt:
*MOST FED OFFICIALS SAW NEXT RATE HIKE LIKELY APPROPRIATE `SOON’ – So June is a lock!
*SOME OFFICIALS SAW FORWARD-GUIDANCE REVISION APPROPRIATE SOON
Mixed with some dovishness.
*FED MINUTES NOTE MODEST INFLATION OVERSHOOT `COULD BE HELPFUL’
The Rest…HERE
