Perhaps the most important line in today's FOMC minutes:
... Several participants suggested that risks to financial stability should appear more explicitly in the list of factors that would guide decisions about the federal funds rate once the unemployment rate threshold is crossed...
What this means is that since the Fed's legacy forward guidance of a 6.5% unemployment threshold is dead and buried (and will become a non-factor as soon as next month when unemployment could fall well below this red line), what the Fed is now suggesting is that the Fed will "qualitatively" guide to more intangible factors: like "risks to financial stability" better known as the prevailing level of the S&P 500. In short, is the Fed about to admit that screw inflation and screw unemployment, it was all about the S&P 500 and making the rich richer all along?
Also, one wonders just what form this guidance will take? A 25 bps rate hike for every 100 upside points in the S&P 500? Or 50 bps if a semi-insolvent Caa/CCC company can issue covenant-lite fourth lien debt at Libor + 1% to widows and orphans from the Ukraine? Alternatively, will the Fed guarantee that the second the S&P enters a correction then it will proceed to resume $85 billion of monthly QE. What about a 1000 point correction - will the Fed simply buy every share of AMZN then?