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Analysts at Nomura suggest that the May FOMC statement provided little new information for our views on the likely trajectory of policy but, they expect that the minutes may reveal a more nuanced discussion about the changes to the inflation language in the statement (emphasizing “symmetric” and dropping “monitoring inflation closely”).

Key Quotes

“Moreover, the minutes will likely show the Committee discounted the slight deceleration in Q1 real GDP growth while highlighting the positive US economic outlook. For policy, we continue to expect a total of four rate hikes this year, one more than the current SEP median for 2018. The May minutes will likely include some signal of the widely expected June hike and potentially give additional information as to whether the Committee is likely to revise up its 2018 rate forecast. For other discussions on the outlook, language on US trade policy and financial conditions will be of particular interest, especially given the slight softening of business confidence surveys over the past few weeks. Moreover, with policymakers frequently referring to a potential inversion of the yield curve after the May FOMC meeting, the minutes could show an in-depth discussion of the policy implications of an inverted yield curve.”

“Finally, the March minutes noted a discussion about revising statement language in the future to acknowledge monetary policy would eventually move from an accommodative to neutral or restrictive stance. Combined with San Francisco Fed President Williams’ recent comments about revisiting the statement’s forward guidance language, any additional discussion on the statement in the May minutes would be of note.”