FOMC Minutes: Most officials saw June hike 'likely' if economy warranted

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Highlights of the Minutes from the April 26-27 FOMC meeting:

Big jump in the US dollar on the 'likely' hike talk. S&P 500 drops about 15 points in a flash.

More:

  • Most judged it would likely be appropriate to hike in June if data remains consistent with Q2 GDP pickup, firmer labor market conditions and progress on inflation
  • Some concerned that markets may not have accurately assessed the chance of a June hike
  • Policymakers expressed a range of opinions on whether there would be enough incoming data before June 15 meeting to warrant a hike
  • Some judged outlook as now roughly balanced, many others continued to see downside risks
  • Few saw it as appropriate to hike in April, two worried that US behind the curve on inflation
  • May expressed confidence that US growth would pick up in coming quarters but some saw risk that a more persistent slowdown underway
  • Generally saw risks from global and financial developments as having diminished but still warranted close monitoring
  • Risks to the projection for inflation were still judged as weighted to the downside, reflecting the possibility that longer-term inflation expectations may have edged down
  • Full text of the FOMC Minutes
 

Fed's Dudley: June is definitely a live meeting


  • Quite pleased to see market increase view on market's June-July views
  • Data will drive what Fed actually does
  • If he's convinced his forecast is on track, then June or July hike is reasonable
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