Most Fed officials saw a tightening likely appropriate “soon”. This can be seen as a hint towards a rate hike in the next meeting in June. What about the slowdown? At the moment, they stick to seeing it as “transitory”. So is inflation, although some officials expressed concern about a slowdown in pursuing the inflation goal. Consumer spending is expected to rebound in the coming months.

The dollar does not seem excited and even drops. EUR/USD tops 1.12, the highest levels for today.

In addition, Fed officials agree that plans to squeeze the balance sheet should be agreed soon. We already get some hints: they would raise the roll-off caps every three months. Almost all Fed officials favor beginning to shrink the balance sheet in 2017.

They also had some words for the stock market, using some odd language: “vulnerabilities have increased for asset valuation pressures”.

A word of worry comes from a comment saying that data that came in between the meeting was weaker than expected. But between this acknowledgment and any change direction, there is a lot of room.

FOMC minutes background – reporting on a sanguine decision

The Fed releases the meeting minutes from the rate decision on May 3rd. At the time, the FOMC left the interest rate unchanged at a range of 75-100 basis points as widely expected. More importantly, officials seemed to have shrugged off the recent slowdown. The drop in the growth rate was deemed “transitory”. They also did not mind too much about the deceleration in inflation. The Core PCE Price Index slipped from 1.8% to 1.6% y/y.

Since then, economic data was not that great. Also, the official core inflation measure dropped under 2%. Moreover, wage growth significantly slowed down to 2.5%, basically showing us that full employment is not that close.

In theory, the FOMC Meeting Minutes documents the discussions around that meeting. However, we know that the document is redacted until the very last moment. Janet Yellen and her colleagues are fully aware that the publication has market implications.

In the past, the meeting minutes took the opposite tone of the rate decision. It makes particular sense in this case. The rate statement was hawkish, data has since deteriorated and they could give us a dovish hint.

Yet, on the other hand, markets still see a high chance of a rate hike in June and some officials seem to embrace this view.

More: Fed minutes, updated GDP and perhaps more Trump trouble