The FOMC September minutes were just released and markets have really started to move. It should have been no surprise that the FOMC focused on interest rates (while not actually saying anything new), the prospect of slowing growth around the world, and the elevated dollar. Here are some excerpts…

Interest rates…

Participants also discussed how the forward-guidance language might evolve once the Committee decides that the current formulation no longer appropriately conveys its intentions about the future stance of policy. Most participants indicated a preference for clarifying the dependence of the current forward guidance on economic data and the Committee’s assessment of progress toward its objectives of maximum employment and 2 percent inflation. A clarification along these lines was seen as likely to improve the public’s understanding of the Committee’s reaction function while allowing the Committee to retain flexibility to respond appropriately to changes in the economic outlook. One participant favored using a numerical threshold based on the inflation outlook as a form of forward guidance. A few participants, however, noted the difficulties associated with expressing forward guidance in terms of numerical thresholds for some set of economic variables. Another participant indicated a preference for reducing reliance on explicit forward guidance in the statement and conveying instead guidance regarding the future stance of monetary policy through other mechanisms, including the SEP. It was noted that providing explicit forward guidance regarding the future path of the federal funds rate might become less important once a highly accommodative stance of policy is no longer appropriate and the process of policy normalization is well under way.

Elevated dollar…

Over the intermeeting period, the foreign exchange value of the dollar had appreciated, particularly against the euro, the yen, and the pound sterling. Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the dollar and have adverse effects on the U.S. external sector. Several participants added that slower economic growth in China or Japan or unanticipated events in the Middle East or Ukraine might pose a similar risk. At the same time, a couple of participants pointed out that the appreciation of the dollar might also tend to slow the gradual increase in inflation toward the FOMC’s 2 percent goal.

Here is what some of the news sources I check out are saying.

Bloomberg – U.S. Stocks Rise as Fed Minutes Spur Stimulus Speculation – Click here to read

ZeroHedge – FOMC Talks Down Dollar, Fears Growth Slowdown, “Considerable Time” Misunderstood – Click here to read

Reuters – Fed minutes show debate on changing rate guidance heating up – Click here to read

The more I look around the more of the same I see. Dovish statements make the markets move higher.

Here is the full transcript if you wish to read yourself.

FOMC Minutes Sept 2014