FOMC minutes preview:
FOMC minutes preview: the minutes to the December 18, 19 meeting will provide more clarity on the policy debate which resulted in a well anticipated 25 bp rate hike. However, recent events, including last Friday's Powell interview, will lessen the market impact. Remember that while policy was tightened at that meeting, as most expected, the shift in language was a little surprising as the phrase "further gradual increases" in rates was only modified, not eliminated. Analysts suspect that was the result of considerable differences among policymakers on the rate outlook, which could be evident in the minutes. It will be interesting to see the discussion on the balance sheet. The November minutes said there were "no clear signs" that the normalization process had "contributed meaningfully to the upward pressure on money market rates." Analysts doubt the Committee was any more worried in December either, hence Powell's "auto pilot" comment.