FOMC minutes: the news out of the December 20 policy statement
FOMC minutes: the news out of the December 20 policy statement was the shift in language, and the Fed minutes clarified here. The word "judges" was added to show data dependence, while the injection of "some" was to convey a relatively limited amount of additional tightening. This reflects the more dovish tone coming out of the FOMC in recent days and weeks, underscoring the Fed's new "patient" stance. Indeed, "many" thought they could afford to be patient. Also, a "few" wanted no tightening last month. And importantly, "Several participants noted that a portfolio of holdings weighted toward shorter maturities would provide greater flexibility to lengthen maturity if warranted by an economic downturn, while a couple of others noted that a portfolio with maturities that matched the outstanding Treasury market would have a more neutral effect on the market."