November FOMC Minutes Preview (1/2): Asset Purchase Options Eyed

The FOMC releases minutes from its Nov 4-5 meeting at 1400ET. With no new action taken at that meeting, attention has been on what Powell indicated in the press conference as a "full discussion" at the meeting about the asset purchase program and "the ways in which we can adjust the parameters of it to deliver more accommodation if it turns out to be appropriate".

• While he noted that the FOMC was comfortable with the accommodation that QE was providing, Powell said, " we understand that there are a number of parameters that we have where we can shift the composition, the duration, you know, the size, the life, life cycle of the program...we may reach a view at some point that we need to do more on that front".
• This is of particular importance ahead of the December meeting which is being eyed for a potential shift in asset purchase policy, given events since the Nov FOMC - including lack of new fiscal stimulus, acceleration in COVID case numbers, and, arguably, the expiry of 13-3 lending programs at end-year.(Vaccine hopes notwithstanding of course).
• FOMC members have publicly mentioned options including increasing the pace of purchases and/or extending the weighted average maturity (WAM) of Tsys. For example Boston Fed Pres Rosengren telling MNI on Nov 10 "the preferred step in my view would be to change the duration rather than increase how much we purchase".
• Obviously any signal that action could be forthcoming in December, or indeed hints that the Committee is not thinking about moving imminently, would be of great interest.
• Other areas of potential interest in the minutes include more detail on the upcoming shift in communications policy in December, and anything new on fiscal assumptions which were baked into the FOMC's economic projections made in September).