The Fed minutes have been released, and they showed that the market interpreted previous actions in a more "hawkish" context than was warranted. The doves remain firmly in control despite what may have been a tactical victory for the hawks on inflation. There appear to be seven members who are very hawkish and want to raise rates as early as 2022, whereas thirteen are now settled on 2023.

The headline of the minutes is still that the Fed may need to pull back support because of a stronger-than-expected economic recovery and levels of growth. Some hawkish Fed officials pointed to stronger than expected economic metrics as a reason to taper sooner, while others cited weaker than expected data in the jobs market. The tight labor market is complicated by empowered workers who appear to be quite confident to quit their current job to seek a better one. The "quit-rate" is just off its all-time highs but still high historically speaking.

One thing is clear from the minutes, those who expected sooner taper action will likely be disappointed. Despite the committee having some vocal hawks, it is clear that much more progress will be required on the employment front before that happens. Inflation has certainly had more strength and breadth than the Fed officials expected but the impl...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free