FOMC Meeting Minutes Spark Rally
As expected, the 2:00 pm release of the FOMC meeting minutes did indeed get the market moving. There’s no way to game this before hand – like on the day of an interest rate policy decision, trader reaction to anything that comes out of the fed can only be guaranteed to be one thing: *Volatile.
From the Minutes of the Federal Open Market Committee March 22, 2005:
In discussing the announcement to be released after the meeting, members agreed that it was appropriate to acknowledge the recent evolution in the inflation situation by indicating that “though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident.
Members also focused on the issue of whether to reiterate the judgment expressed in the Committee’s recent statements that ”. . . policy accommodation can be removed at a pace that is likely to be measured.” Some expressed the view that such language could constrain future policy inappropriately; while these concerns were not new, they were now felt to be more pressing, as the odds that the Committee might need to step up the pace of policy firming were thought to have increased.
To my eye there is little of surprise in the release, and it may be the absence of surprising language that is propping markets up. I’ve picked up some long exposure, closed out most, but not all of my short exposure, and will wait until tomorrow before dramatically alerting my swing trade and investment stance.
05.04.12 15:00 #