Cheyenne Journal

Wall Street to give Fed minutes a once-over

Wall Street to give Fed minutes a once-over

The Federal Reserve’s September meeting was notable for what the Fed did not do: raise interest rates for the first time in nearly a decade, a decision that at the time confused investors and caused a fresh bout of turbulence in an already volatile stock market. But Wall Street knows it was a close call. Traders will scrutinize the minutes of the Sept. 16-17 meeting, which are set for release this afternoon, to see just how close.Wall_Street_Sign

While a lot has happened in the past three weeks that lead Wall Street pros to believe that a Fed rate hike is farther away than in September, more clarity about why the Fed stood pat last month (they cited still-low inflation, market turbulence and worries about global economic conditions) is what Wall Street is looking for. Since the September meeting, data on jobs and manufacturing have been disappointing, resulting in a scaled down growth outlook for the U.S. economy.

When it comes to the minutes, “It’s all about timing,” says Bill Hornbarger, chief investment officer at Moneta Group. “Anything that provides a clue … and factors impacting the timing” of the first hike. A risk to markets is if the “minutes appear more hawkish than where the market is now” on the timing of Fed’s first move, adds Quincy Krosby, market strategist at Prudential. The market now believes Fed “lift-off” won’t occur until March 2016. “Of (key) interest will be the breakdown of how many of the 13 voting Fed members want to see a rate hike in October or December,” Krosby says.

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