The Market’s Misread Of The Fed’s Minutes

Last week, the Federal Reserve released their March FOMC meeting minutes. Following the release, the markets surged higher as the initial reading by the markets was “the Fed is done hiking rates.” As the Wall Street Journal reported in Fed Minutes: Officials See Little Need to Change Rates This Year.

‘Minutes of the March meeting released Wednesday showed officials see little reason to continue raising rates due to greater risks to the U.S. economy from the global growth slowdown and muted inflation readings that took more officials by surprise.

‘A majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year,’ the minutes said.

At the same time, the minutes show officials didn’t perceive any need to cut their benchmark rate absent a broader deterioration in the economy. Officials said their view of the appropriate setting for interest rates ‘could shift in either direction based on incoming data and other developments.’

Since officials last met, President Trump has said he would like to see the Fed undo its last two rate increases. Fed officials have said they will base their decisions on the economic outlook and not political pressure.’

See, nothing to worry about as there are no recessions predicted by the Fed…ever.

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As Peter Bookvar noted Wednesday afternoon, don’t believe for a moment the Fed isn’t specifically targeting the market: