UBS FOMC Meeting Minutes Review - FJElite

The FOMC meeting minutes contained a lot of information we already knew, such as the risks shifting, most participants assumed a rate cut or cuts were still appropriate in 2026, and the System Open Account Manager signaled the pace of asset purchases might gradually slow at some point after April 15. We show the "dot plot" and projections below. Two participants mentioned they had pushed out the timing of their assumed cuts in the dot plot, in light of "recent readings on inflation."

The new news was the discussion of the risks stemming from the energy price shock. Although "many" thought there might be a reason to raise rates in the future, more, or to be specific "most" thought they might need to cut rates more than previously assumed. We show the numerical qualifiers below, based on the Federal Reserve's own publications ranking them and describing what they mean. "Most" will be 10 or more participants. "Many" will be 9 or fewer participants. If most FOMC participants are raising the odds they have to cut more, that would not appear to be influencing the market reaction.

In the desire to make the risk description more two-sided, not many made the case in light of the energy price increase already underway by the time of the meeting. "Some participants judged that there was a strong case for a two-sided description of the Committee's future interest rate decisions in the postmeeting statement, reflecting the possibility that upward adjustments to the target range for the federal funds rate could be appropriate if inflation were to remain at above-target levels. " The word "some" would reflect 5 to 7 participants. While 7 might be "many", 8 or 9 participants almost certainly would no longer be "some."