The markets were long waiting for the release of Fed’s minutes of meeting held in the end of May. They were finally released on Wednesday and keeping in tune with what the Fed officials had been hinting in the past few days, it said that rate hike is coming soon.
The markets have already discounted this fact as that has been hinted from past some time. It was basically looking for a more dovish language. Actually, the Wall Street was looking for some clues that would give it the idea of how many times and when the Fed would raise the rates in 2017.
The chief market strategist at TD Ameritrade, JJ Kinahan said, “We’re back to figuring out what very ambiguous terms mean. For today, the market is interpreting this as not much has changed.”
Dow Jones however, maintained its record closing for the 9th consecutive day closing 30 points higher than the previous close with DuPoint and 3M being the biggest contributors in the gain today. S&P 500, on the other hand, closed some 0.11 percent lower with energy shares being the biggest losers on the circuit. The third major index NASDAQ also closed lower by 0.09%.
The director of research at FBB Capital Partners, Mike Bailey speaking on the Fed’s release said, “Based on the initial move, the market was hoping for more dovish language. I think this is pretty hedged language. It gives [Fed Chair] Janet Yellen some breathing room. This could mean anything between March and June.”
Most of the analysts are of the opinion that data on inflation and jobs indicates that Fed might go for a rate hike in its March meet. The same has been indicated by Fed officials too. Loretta Mester, the President of Cleveland Federal Reserve addressing a gathering in a one-day banking conference at Singapore has said: “I’d be comfortable with an increase in the (federal) funds rate at this point, if the economy keeps going the way it’s going.” The same has been indicated by Patrick Harker, Philadelphia Fed President too.
The chief market economist Peter Cardillo, working at First Standard Financial said, “Fed officials have been hawkish and the economic data points to an expanding economy. We know the Fed wants to raise rates because they’ve told us.”
The markets are however wary that if the risks increased with future data on jobs and inflation not coming strong enough then the Fed might overshoot its goals.