Since the June FOMC meeting, Gold has dramatically outperformed. Stocks are higher but bonds and the dollar have roundtripped to unchanged (at least before Powell's testimony sparked some comeback).
Better-than-expected macro data has been the theme in the short amount of time since the June FOMC meeting...
But Powell vehemently shrugged good news off today, happier instead to promote the more pessimistic side.
However, eyes remain on the FOMC Minutes for any more signs of dovishness spreading across the Fed members, though notably Powell's testimony today - uber-dovish - outweighs one-month old meeting minutes.
In fact today alone, the odds of a 50bps rate cut in July has surged to 23% from 0% before Powell spoke...
But the Minutes still managed to be more dovish than expected...
*MANY FED OFFICIALS SAW STRONGER RATE-CUT CASE AMID RISING RISKS
*FED: SEVERAL OFFICIALS DIDN'T YET SEE A STRONG RATE-CUT CASE
There was one sensible member...
*A FEW FED OFFICIALS SAW RATE CUT RISKING FINANCIAL IMBALANCES
But, downside is the worry now...
*MANY FED OFFICIALS IN JUNE SAW RISKS WEIGHTED TO THE DOWNSIDE
Key excerpts from the Minutes include (via Bloomberg)
"While overall financial conditions remained supportive of growth, those conditions appeared to be premised importantly on expectations that the Federal Reserve would ease policy in the near term to help offset the drag on economic growth stemming from uncertainties about the global outlook and other downside risks."
"Several participants noted that a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy and, hence, was appropriate policy from a risk-management perspective"
"Many participants noted that they viewed the risks to their growth and inflation projections, such as those emanating from greater uncertainty about trade, as shifting notably over recent weeks and that risks were now weighted to the downside"
"Many participants indicated that the case for somewhat more accommodative policy had strengthened"
"Many judged additional monetary policy accommodation would be warranted in the near term should these recent developments prove to be sustained and continue to weigh on the economic outlook."
"Many participants noted that, since the Committee’s previous meeting, the economy appeared to have lost some momentum and pointed to a number of factors supporting that view including recent weak indicators for business confidence, business spending and manufacturing activity; trade developments; and signs of slowing global economic growth."
For now, Fed Funds futures are steady after the Minutes, with 70bps of easing priced in for 2019.
* * * Full Minutes Below: