On The FOMC Minutes: Don't Read Too Much Into Them

Tyler Durden's picture


Today brings the release of the Minutes of the March 13th FOMC meeting. As Steven Englander of Citi notes today, since the tone of the Minutes reflects the breadth of opinion among FOMC members the risk is that it reads somewhat more hawkish than recent comments by Chairman Bernanke. Persistent hawkishness from other FOMC members could foster the perception that Bernanke will face greater resistance in any push to introduce additional accommodation which could have a negative impact on risk appetite and lend support to USD. This would be particularly true if mentions of possible further easing by FOMC doves are few and far between. Given that interest rate expectations have declined over the past two weeks since the series of speeches by Chairman Bernanke, there does appear to be some room for investors to price in more Fed hawkishness. As reflected in implied yields for December 2013 eurodollar futures, interest rate expectations have dropped nearly 20 bps since March 20th. However, this drop in yields only reverses part of the rise seen in the wake of the Chairman’s earlier Senate testimony and the release of the FOMC statement, so ultimately scope for a rebound should not be open ended. Coupled with the fact that Bernanke’s comments are more recent than March FOMC meeting, this convinces us that risk return in chasing any bout of USD strength upon the release is unattractive.

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Tue, 04/03/2012 - 13:15 | 2313549 francis_sawyer
francis_sawyer's picture

Annotated FOMC Minutes:

"OK boys & girls, keep those fingers on the PRINT button... Any other items?... No?... Meeting adjourned"

Tue, 04/03/2012 - 13:36 | 2313646 slaughterer
slaughterer's picture

Englander: "Do not be fooled by the hawkish tone, boys and girls, Uncle Ben has got his finger on CTRL + P..."

Tue, 04/03/2012 - 13:39 | 2313660 TwoJacks
TwoJacks's picture

looking at $TNX since March 13, a ramp in the rate came back a bit.  It started that day. Perhaps the hawkish tone that everyone thinks dies a quiet death will in fact be reinforced once the minutes are out.

Tue, 04/03/2012 - 13:41 | 2313672 cnhedge
cnhedge's picture

if they mentioned any hint of discussion of potential qe3 forms, sterlizaed, twist of twist, then the qe expectation will be live again, though i doubt it.


Tue, 04/03/2012 - 13:43 | 2313680 distopiandreamboy
distopiandreamboy's picture

Ben: Man your printers!
Ben: What's that? We're outta paper? Well just buy more from the paper producers...
Ben: Waddya mean they'll only accept an asset-backed payment? I know we'll give them MBSs! There now all problems are solved and everything will be fine.


Tue, 04/03/2012 - 15:39 | 2314278 BidnessMan
BidnessMan's picture

Don't need no stinkin' paper! Just add some electronic bits to Bank balances at the Fed and max up all the 48 million + EBT cards. Done.

Tue, 04/03/2012 - 13:44 | 2313681 walküre
walküre's picture

After the revolution, all these "tools" of central bankers will be abolished. A currency reset and jubilee will re-establish monetary value and with that, the true value of an honest day's work. Of course all the shysters will be unemployed because they can no longer print themselves one paycheque after another. Workers will be paid a wage that allows them to support their families, own a home outright and take a vacation once per year. Management will get capped and paid for actual leadership skills. If they want more, they need to be able to improve the revenues without reducing worker's salaries or outsourcing to a 3rd world slave labor camp. Failing that they don't get paid more and if they don't like it, they can leave. The new economy after the revolution will attract plenty good quality staff.

Question is, when.

Tue, 04/03/2012 - 13:48 | 2313695 optimator
optimator's picture

It takes the insiders three weeks to look at the notes?  We, the  sheeple shouldn't have to wait this long just because they are so slow.

Tue, 04/03/2012 - 13:48 | 2313701 slaughterer
slaughterer's picture

"Markets are down, therefore QE hopes must be re-invigorated."   The Fed's cogito. 

Tue, 04/03/2012 - 13:49 | 2313707 TooBearish
TooBearish's picture

Tyler - bit of collateral squeeze going on in RP land due to ECB fukking sov collateral in euroland- putting bid into US tsy garbage as a surrogate...FYI maybe u can dig up some good shite on dat!

Tue, 04/03/2012 - 13:51 | 2313712 sbenard
sbenard's picture

Anyone -- what time is the release?

Tue, 04/03/2012 - 13:58 | 2313740 lsbumblebee
lsbumblebee's picture

What say we not read them at all, 'kay?

Tue, 04/03/2012 - 13:58 | 2313741 TooBearish
TooBearish's picture

2pm EDT

Tue, 04/03/2012 - 14:02 | 2313759 sbenard
sbenard's picture


I guess it's now obvious! :)

Tue, 04/03/2012 - 14:03 | 2313764 TwoJacks
TwoJacks's picture

ten year. toast. hawkish.

Tue, 04/03/2012 - 14:11 | 2313807 Bastiat009
Bastiat009's picture

You should read into what the Fed says and does because the Fed controls all the markets. Unless you're on food stamps, you'd better pay attention to what the fed does and says if you don't want to lose money. Look at the gold market, which is crashing every single time the Fed wants it to crash.

Tue, 04/03/2012 - 15:15 | 2314160 Scalaris
Scalaris's picture

Can't put my finger on it but something tells me that every single economic index will tumble during the forthcoming months upto August.

Although the food-stamp printing industry is flourishing at the moment..

Tue, 04/03/2012 - 16:34 | 2314521 XtraBullish
XtraBullish's picture

Shorted AAPL today for the first time ever...bubble-icious personified.


Tue, 04/03/2012 - 23:33 | 2315382 Goldtoothchimp09
Goldtoothchimp09's picture

Citi ??? Do the opposite, Duh

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