FOMC Meeting Minutes
Also released yesterday afternoon were the minutes from the July 28-29th FOMC meeting. There were no major surprises to come from them, but they did show an extended discussion about the potential need to raise key short-term interest rates if inflation doesn’t move towards the Fed’s goal of 2.0% quicker than it has been. The three dissenting votes to keep rates unchanged last month all wanted to raise them by a quarter point, feeling it would prevent the need for more drastic action down the road. One noteworthy point to come from minutes was the fact Chairman Warsh put together a task force to weigh the possibility of reducing the number of FOMC meetings from the current eight per year to just six per year. The theory is that this would allow more economic data to be made available between meetings. Overall, the bond market appeared to react favorably to the release, improving slightly after the minutes were posted at 2:00 PM ET. It wasn’t enough of a move to cause widespread rate revisions, but does allow us to label the minutes as favorable.