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Don't Overthink The FOMC Minutes, Goldman Suggests: "There Were No Surprises"

Tyler Durden's picture




 

While everyone tries very hard to read between the lines of the Fed minutes with the consensus conclusion being that suddenly (as opposed to previously?) the Fed is confused about what the best exit strategy is, with words such as reverse repos thrown around for dramatic impact even though this topic has been around for nearly a year, the reality is that there was absolutely nothing market moving or material in today's report (which furthermore reduced the use of the word "weather" from 15 instances in March to just 8 in April although no mentions of El Nino just yet). Here is Goldman's FOMC minutes post-mortem confirming just this.

From Goldman's Jan Hatzius

No Major Surprises In April Minutes

BOTTOM LINE: The April FOMC minutes contained no major surprises. There was no news on the likely date of the first funds rate hike or the pace of subsequent hikes, and participants' views on the economic outlook were unchanged. Participants discussed the exit strategy and were in favor of further testing of policy tools, but no new policy decisions were made.

MAIN POINTS:

1. The April minutes contained no new information on the likely date of the first fed funds rate hike or the pace of subsequent hikes.

2. Participants discussed the exit strategy in a joint meeting of the FOMC and the Board of Governors, but emphasized that this was intended as "prudent planning" and not an indication that normalization would begin soon. Participants were in favor of additional testing of tools including the term deposit facility, but did not make any new policy decisions with respect to the exit strategy. "A number of participants" suggested providing more information about how long reinvestment of Treasuries and MBS will last.

3. "A number of participants" expressed concern that the slowdown in the housing sector could prove persistent. "A couple" of participants specifically mentioned tight lending standards as a concern for the housing market, in line with comments by Fed Chair Janet Yellen during the March press conference.

4. Participants discussed research on the relationship between labor market slack and inflation at length. "A number" of participants argued that the unemployment rate currently understates total labor market slack and "expressed skepticism about recent studies suggesting that long-term unemployment provides less downward pressure on wage and price inflation than short-term unemployment does." The staff noted that wage growth, import prices, and commodity prices remain soft, and both "most participants" and the staff continued to forecast that inflation will require a few years to return to the 2% target.

5. The Fed staff did not make any major changes to the medium-term economic forecast and continued to view weakness in the early part of Q1 as transitory and largely owing to the unusually cold and snowy winter weather. Participants did not materially change their views on the economic outlook from March either.

6. Participants discussed financial stability concerns, but were generally not concerned about risks from financial imbalances

 

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Wed, 05/21/2014 - 15:39 | 4782306 TheRideNeverEnds
TheRideNeverEnds's picture

I am a bit surprised... that we are only up 1%. 

 

The market is still drastically undervalued as measured by the FED balance sheet.  

Wed, 05/21/2014 - 15:41 | 4782307 BeetleBailey
BeetleBailey's picture

Goldman.....those fucks....fuck them....the only surprising thing is that some nut-wing is not scoping the members of this illegal cartel of shit right now....

Lloyd Blankfein? Hey you...Squid....FUCK RIGHT OFF

Wed, 05/21/2014 - 15:50 | 4782337 PontifexMaximus
PontifexMaximus's picture

If you can't beat them, join them!

Wed, 05/21/2014 - 16:58 | 4782606 Stoploss
Stoploss's picture

Where's the part about how they are still laundering funds through Belgium, and the "taper" is a hollow statement, since QE has been increased, that no one has figured out yet??

Wed, 05/21/2014 - 15:50 | 4782336 ebworthen
ebworthen's picture

Someone in the FED said they ought to raise rates before QE ended, San Fran FED I think.

Sure; since the recovery is here put prime at 5% and pay Mom and Pop for saving.

Wed, 05/21/2014 - 16:10 | 4782416 Unknown Poster
Unknown Poster's picture

The recovery and free beer are tomorrow.

Wed, 05/21/2014 - 16:55 | 4782591 Rainman
Rainman's picture

the unrigged prime rate has been 3.25 long enough to fight 2 world wars and then some

Wed, 05/21/2014 - 15:51 | 4782342 brucekeller
brucekeller's picture

Thus begins the summer melt up.

Wed, 05/21/2014 - 15:59 | 4782359 bubblemania
bubblemania's picture

With less and less liquidity injections it will more likely be a summer meltdown. My JP Morgan money manager is telling me NOT to buy equities and to wait for the Fall, while my UBS money manager is 100% confident that the market will continue to go higher. Whats a girl to do?

Wed, 05/21/2014 - 16:55 | 4782595 Everybodys All ...
Everybodys All American's picture

I'm 100% sure your UBS guy doesn't make money unless you are in stocks. I'd also bet he doesn't know how a bear market starts.

Wed, 05/21/2014 - 19:01 | 4783041 TheRideNeverEnds
TheRideNeverEnds's picture

Slowly and after they have rung the bell at the top right?

Wed, 05/21/2014 - 16:07 | 4782400 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Yeah right...who is worse goldman or the fed? Fuck'um both.

Wed, 05/21/2014 - 16:21 | 4782468 timmeh
timmeh's picture

what was the word count this time?

Wed, 05/21/2014 - 16:30 | 4782503 JustObserving
JustObserving's picture
Don't Overthink The FOMC Minutes, Goldman Suggests:

We know - we dictated them.

Wed, 05/21/2014 - 16:41 | 4782545 RaceToTheBottom
RaceToTheBottom's picture

"

Don't Overthink The FOMC Minutes, Goldman Suggests"

 

Don't worry your little head, you Muppets.

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