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Minutes: JPM Notes Downside Risk Emphasis; Goldman Sees No MBS Sales Soon

FED

A few of the analyst takes on May's otherwise unexciting FOMC minutes that stand out:

  • JPM: "Overall, the tone of the minutes about the path of policy was hawkish, but no more hawkish than other recent Fed-speak, including from Chair Powell....Regarding risks to the outlook, the Committee focused almost entirely on upside inflation risks; there was a one-sentence discussion of downside growth risks."
  • Goldman: The minutes "support our view that FOMC will most likely not consider selling MBS in the near-term, and possibly not until after the balance sheet reaches its equilibrium size and the goal shifts to tilting the composition toward Treasuries."
  • Rabobank: The minutes "could imply a pause in December, but given the persistence in inflation we think it’s more likely that after July the FOMC will continue with 25 bps hikes until the appropriate restrictive level is reached....the minutes and Powell’s recent interviews support our view that the Fed is going to hike the economy into recession."
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A few of the analyst takes on May's otherwise unexciting FOMC minutes that stand out:

  • JPM: "Overall, the tone of the minutes about the path of policy was hawkish, but no more hawkish than other recent Fed-speak, including from Chair Powell....Regarding risks to the outlook, the Committee focused almost entirely on upside inflation risks; there was a one-sentence discussion of downside growth risks."
  • Goldman: The minutes "support our view that FOMC will most likely not consider selling MBS in the near-term, and possibly not until after the balance sheet reaches its equilibrium size and the goal shifts to tilting the composition toward Treasuries."
  • Rabobank: The minutes "could imply a pause in December, but given the persistence in inflation we think it’s more likely that after July the FOMC will continue with 25 bps hikes until the appropriate restrictive level is reached....the minutes and Powell’s recent interviews support our view that the Fed is going to hike the economy into recession."