Fed Minutes Reveal Fed's Thinking 3 Weeks Ago: Value Zero

Mike Mish Shedlock

Today we found out what the Fed thought nearly a month ago. What's that worth?

Mainstream media wasted this afternoon analyzing Minutes of the March 20-21 FOMC Meeting.

Some of the conclusions were interesting. For example, the BBC reports Federal Reserve Eyes More Aggressive US Interest Rate Path.

The BBC claims "Some members of the Federal Reserve are urging the bank to consider raising interest rates more quickly, in what could mark a turn from its gradual approach in recent years."

Slightly steeper?

"Almost all" participants agreed that a gradual approach to raising interest rates remained appropriate in the medium term, according to the minutes.

However, "a number of participants" said they expect stronger growth and inflation in the next few years, suggesting the path for interest rates "would likely be slightly steeper than they had previously expected", according to the minutes.

Members also discussed the need to state "at some point" that its policies would likely move from trying to spur economic activity, to being neutral - or even a "restraining factor".

Headline vs Reality

The question "Slightly Steeper?" is quite a bit of a variant from "Fed Eyes More Aggressive US Interest Rate".

Beliefs the Same Today?

Those minutes are nearly a month old, more precisely, 22 days.

At best, we know what the Fed thought back then. More realistically, we know what the Fed wanted us to believe back then. That may be different that what they really did believe.

Even if we assume the minutes accurately reflect the overall Fed sentiment on March 21, is the Fed's assessment unchanged?

Since then we have had numerous economic reports. Retail spending has declined three months in a row. The Atlanta Fed GDPNow model has real final spending, the true bottom line measure of GDP at 0.9%.

The threats of trade wars and real wars are unfortunately very real. Global economic growth estimates are falling.

Related Ideas

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  2. Confidence? Retail Sales Down Third Month
  3. Wholesale Inventory Build Continues as Retail Sales Flounder
  4. Globally Bad Weather: A Musical and a Sweatshirt Tribute

Value Zero

There is no value in deciphering what the Fed may have wanted us to know about events three weeks old. Our interpretations may be wrong and their beliefs may have changed.

Mike "Mish" Shedlock

Comments (3)
No. 1-3

Who foots the bill for these meetings? The tax-payers. In short, we pay the Fed participants (in addition to salary mind you) to meet, sprout some non-sense, as if they know and understand what is happening (that they do not was clear way back in 2007/2008), release the minutes and go snooze. The only thing we know that they know is this...

  1. If market falls, they will come talking about QE (e.g. Bullard a few years back)
  2. If market falls some more, they will say no rate hikes
  3. If markets crash, they will do QE, provide free money to banks and cut interest rates.

Waste of tax-payers money. I think we should hold them accountable to how they spend the tax-payers money.


You guys are too hard on the Fed! Besides teaching us all about stroke symptoms during speeches, they wield the power to keep seldom used words like "conundrum" and "bazooka" in the American lexicon. That alone is worth destroying the living standards of the bottom 95-99% of the national population. Sure, they complain that they can't see anything coming until it actually happens, but we're lucky to have them!


All this and more, for a 2% inflation target. From 1980, how long did it take for the FED to get from double digit inflation, down to 2% inflation? How long from 2009, to get up to 2% official inflation? The Fed sets it sight on targets it can't maintain. 8 years to get to so-called full employment, just about in time for another recession.

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