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Preview of Fed Minutes

Lakshman Achuthan, managing director at Economic Cycle Research in New York, previews today's release of the minutes of the Federal Open Market Committee's meeting on Dec. 12. Achuthan spoke in an interview ahead of the release.

Investors and economists look to minutes of FOMC meetings for indications of how the Federal Reserve may move on interest rates and the central bank's assessment of the U.S. economy.

On what he anticipates the minutes will tell investors: Achuthan is looking for "some confirmation of this adjustment the markets have been making to the view that, rather than having the Fed ease sometime very soon and actually cut interest rates in the near term, they may be on hold a little longer than people originally thought."

The Fed may communicate this "by saying a combination of things. One is that the economy is still fundamentally healthy; it's not falling apart. So there is no fear of recession or a hard landing any time soon. But at the same time, they're going to remain vigilant about upside inflation pressures."

"On the effect of the weak housing market: "It's obvious the housing market nationally has been softer for some time. I don't think anyone can discount that. I doubt the Fed will ignore it in their statement. However, they may imply the view that things are happening in an orderly pace, that they're not falling apart. That's the key. The lack of panic we're likely to see in the statement will imply that they're not scared at this point, they're not going to be cutting rates any time soon.''

On whether the minutes might signal when the Fed will move: "They may be saying they're not in any hurry, and they're going to have to wait to get further data. It's not a very exciting statement they'll make in that sense, but they may simply say, "We're not afraid at the moment or compelled to do anything to the upside or the downside, and we're just going to sit tight and wait a little longer."