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11/19/14

How to read the Fed minutes quickly

We get the Fed minutes for the last meeting at 2pm today. Last time they came (October 8th) they caused a kerfuffle in dollar trading and therefore just about everything else. So this time you'll want to pay attention as well, but the thing is the Fed minutes tend to be loooong and it's not so easy to get the market moving juice from them as it is the brief FOMC statement.

So here's how to do it in five handy steps:

1) When it's released (2pm ET today) it's released onto a link here

2) Open it and scroll straight to the bottom.

3) Read the short dissenting section and why the dissenters voted against the policy decision.

4) If there's anything interesting, compare it to the last Fed minutes dissent section.

5) If there's anything different, the game is on. Because that's what you want, interesting and different dissent.

The end. Here's the dissent from last time, just so you know:

Voting for this action: Janet L. Yellen, William C. Dudley, Lael Brainard, Stanley Fischer, Narayana Kocherlakota, Loretta J. Mester, Jerome H. Powell, and Daniel K. Tarullo. 

Voting against this action: Richard W. Fisher and Charles I. Plosser.

President Fisher dissented because he believed that the continued strengthening of the real economy, the improved outlook for labor utilization and for general price stability, and continued signs of financial market excess will likely warrant an earlier reduction in monetary accommodation than is suggested by the Committee's stated forward guidance.
Mr. Plosser dissented because he objected to the statement's guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for "a considerable time after the asset purchase program ends." In his view, the reference to calendar time should be replaced with language that indicates how monetary policy will respond to incoming data. Moreover, he judged that the statement did not acknowledge the substantial progress that had been made toward the Committee's economic goals and thus risks unnecessary and disruptive volatility in financial markets, and perhaps in the economy, if the Committee reduces accommodation sooner or more quickly than financial markets anticipate.