The Fed remains patient and cautious approach: Many Fed officials inclined to stay at zero longer, minutes show. Fed minutes note risks from China, Mideast, Ukraine, Greece, etc. They did not want markets to be obsessed with dates. Continued tepid wage growth could restrain spending
USD is down but not too dramatic. It’s important to note that since the meeting was held in late January, we had the excellent NFP report. The next NFP report is important for the March decision, which is accompanied by a press conference and forecasts.
Here is a quote from the minutes, related to patience:
Many participants regarded dropping the “patient” language in the statement, whenever that might occur, as risking a shift in market expectations for the beginning of policy firming toward an unduly narrow range of dates. As a result, some expressed the concern that financial markets might overreact, resulting in undesirably tight financial conditions
Regarding the dollar:
The increase in the foreign exchange value of the dollar was expected to be a persistent source of restraint on U.S. net exports, and a few participants pointed to the risk that the dollar could appreciate further
The FOMC Meeting Minutes from the January 28th meeting were expected to clarify the Fed’s stance on various issues, most importantly the timing of the rate hike and most interestingly the reference to “international developments.
The USD was moving higher in the day towards the release, despite not-so-good economic data. The pound was the only currency that gained nicely against the greenback.
See the preview: 6 quick points toward the FOMC Meeting Minutes
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