### POV, EXPECT SOME EXCITEMENT FROM JUNE......>

FOMC: ### POV, EXPECT SOME EXCITEMENT FROM JUNE 12-13 FOMC MINUTES

- June 12-13 FOMC minutes at 1400ET Thu. Mkt absorbs heavy flurry of data/event

risk latter half of wk on return from Independence Day holiday Wed (ADP private

employ, FOMC min'ss Thu; Jun NFP (+195k est vs. +223k prior) Fri as well as

whether U.S. Pres Trump will decide to go through w/ tariffs on Chinese goods).

- Recognizing tighter labor market and expected economic growth, FOMC delivered

a "hawkish hike" that was largely expected w/fund rate to 1.75% to 2.0% on 8-0

vote, dots suggest four hikes in 2018 and IOER was raised to 1.95%.

- What wasn't expected: Fed rolled out most changes in any single statement.

Expect to see more on deletion of forward guidance re: FFR "is likely to remain,

for some time, below levels that are expected to prevail in the longer run." Fed

also deleted "likely to warrant further gradual increases in the federal funds

rate." But kept the statement that risks are "roughly balanced." 

- Providing further insight, don't expect mkt to price in significantly higher

hike chances from current 79.1% in Sep, 39.4% Dec (MNI PINCH model), flatter yld

curve as harbinger for future recession may me mentioned.