Goldman's FOMC Post-Mortem: "Slightly Hawkish Tilt"

Tyler Durden's picture

As always, for the best take of what the Fed was thinking, skip Hilsenrath and go straight to the people who provide it with its talking points. Here is Goldman's Jan Hatzius with hos  post-mortem of the just released FOMC minutes.

Slightly Hawkish Tilt to July FOMC Statement


BOTTOM LINE: The July FOMC statement showed more of an acknowledgement of firming inflation and reduction in downside risks to inflation than we had expected. Changes to language on the labor market were mixed. Philadelphia Fed President Plosser lodged a hawkish dissent.




1. The statement's language was adjusted to indicate that inflation "moved somewhat closer to the Committee's longer-run objective," rather than "has been running below the Committee's longer-run objective." In a similar vein, the Committee now judges "that the likelihood of inflation running persistently below 2 percent has diminished somewhat."


2. Language on the labor market was upgraded slightly. "Labor market conditions improved, with the unemployment rate declining further," replaced "labor market indicators generally showed further improvement." However, the statement added new language indicating that "a range of labor market indicators suggests that there remains significant underutilization of labor resources," providing a dovish counterweight.


3. The pace of asset purchases will be tapered by a further $10bn/month (to $25bn/month) starting in August. In an accompanying statement, the New York Fed indicated that purchase distributions will remain unchanged, but the number of individual Treasury operations per month will continue to be reduced.


4. Philadelphia Fed President Plosser dissented to the statement, indicating discomfort with the "considerable time" language used to describe the expected delay between the end of QE and the first rate hike.

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power steering's picture

Breaking: WH's latest impeachment scare fundraising appeal

ebworthen's picture

Impeachment?  What?  Do they really want Biden at the helm?

He'll hit the red "Launch" button thinking it is the "Lunch" button.

PlusTic's picture

Hey Goldman Sucks...blow me you gaggle of faggots!

orangegeek's picture

POMO is down to 25B for Aug - take out FOUR 2.5B POMO days in July


SPX up 8 pts in July - so far - we still have tomorrow


poorest performance since Jan


4% GDP - should this up your ass yellen

ebworthen's picture

Sounds like they're bickering, which is a sure sign of a "WTF do we do now!?!?" moment.

AcidRastaHead's picture

Return on word clouds ain't what it used to be.

TabakLover's picture

If SP closes below it's 25 day moving average today, it will be the first time it has done that since April 14 when it was at 1848.



Duffy's picture

Honestly, this is just about meaningless.

Audit the fucking Fed already.

youngman's picture

Every meeting from here on out will always have an excuse as to why they are not going to raise rates....

CHX's picture

The Fed can stay insolvent due to eternal liquidity longer than all of us chatting here.

CHX's picture

Reduce taper by 10B, increase shadow bank lending 10B. Belgium anyone?