There was not much reaction to yesterday's release of the minutes summarizing the May 3 meeting of the Federal Open Market Committee. In the blogoshpere, The Prudent Investor and William Polley have nice posts on the subject (here and here). William thinks the minutes "quite interesting and informative," but the markets generally gave them a big ho-hum. From Briefing.com:
In sum the FOMC minutes simply detail what we already knew -- policy rates remain low (both on a real and nominal basis) and the Fed intends to continue to gradually lift them depending on the economic environment. The economy has shown stronger growth and lower inflation since the meeting which should keep the Fed at the 25 bp pace at the next few meetings. When the Fed will slow the pace is anyone's guess as the probabilities rise once the funds policy rate (presumably) rises to 3.5% in August -- the lower end of the neutral rate range. The funds futures market currently prices the January contract at a 3.755% effective rate which presumes three 25 bp hikes over the remaining five meetings in 2005.
The winner of best pop culture reference comes from Canada's National Post:
What Yoda and his colleagues offered in the usual half-full, half-empty Fedspeak gave some insights into Fed thinking. Yet there was little observers could easily conclude about what the Fed might be doing with interest rates at coming FOMC meetings. While the Fed governors noted weaker U.S. economic data on May 3, they voted to raise the Fed funds overnight lending rate another quarter point to 3% to offset inflation risks.
The policy of publishing FOMC minutes three weeks after the meeting is enlightened. But in this case, investors must look at the minutes in the knowledge that May 3 was a long time ago in an economic galaxy far, far away.
Meantime, the next FOMC meeting is not until June 29-30, meaning the economic data and signals that have been shaping markets recently might change Fed thinking even more before Yoda and crew convene again.
May the force... oh, never mind.