FOMC Minutes, September meeting
The FOMC key points:
1) A few FOMC members expect it necessary to have policy restrictive for a time.
2) A 'number' said it would be necessary to raise the FFRate above their assessment of the longer run level.
3) A 'couple' of members said they were not in favor of a restrictive policy in the absence of 'clear signs' of an overheating economy and inflation.
4) There was no change in position as a result of removing the language regarding an accommodative policy -- it was just time to do so.
5) All agreed it was good to keep hiking at a gradual rate, particularly the 25BP at the September meeting.
There were comments about trade being a potential problem, about the yield curve and its predictive nature, but they were just dressing thrown around the edges of the elephant in the room.
No mention of being data driven. This is now a Fed that is going to hike above the neutral level. As some are saying, Powell has adopted the 'hike until something breaks' approach to monetary policy. Why should he not? ALL of his predecessors did that except Yellen who would have done so eventually if she was still there.
Basically, the stock market received affirmation of the Fed's intentions. The Fed has not broken anything yet, but the action of the market the past three weeks is that it is just a matter of time.
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