In opinion of Valtteri Ahti, chief strategist at Danske Bank, the FOMC minutes contained a lot of useful information as its members agree to stay patient for now but disagree for how long.
“While “Many participants suggested that it was not yet clear” whether another Fed hike is “appropriate later this year”, “several others” indicated it would be if the economy evolves as expected. So it seems like we are in for another doves versus hawks later this year, especially as “many” said the Fed could change the “patient” language if “uncertainty abated”.”
“We stick to our view the Fed may hike again in June based on our optimistic macro outlook but the probability declined after Fed put more weight on inflation in its reaction function.”
“The FOMC members also discussed the relevance of continuing the dot plot, which is another discussion to look out for in 2019. With respect to the balance sheet, “almost all” think the Fed “before too long” should announce a plan to end the runoff “later this year”.”
“We think an announcement on the balance sheet is more likely than not already in March (60% probability, otherwise in May) and the runoff will be completed in Q4.”