"Various" Issues With A Higher Terminal Rate

As we noted after the dovish reaction to the Nov FOMC Minutes release, the standout language was that "Many participants commented that there was significant uncertainty about the ultimate level of the federal funds rate" but "various participants noted that...their assessment of the ultimate level of the federal funds rate that would be necessary to achieve the Committee's goals was somewhat higher than they had previously expected."

• That is a dovish development, the keys being "various" and "somewhat".
• "Various participants" is a somewhat vague term that began appearing in the minutes a couple of years ago, but a reasonable interpretation in the context of the paragraph is that it is less than "many".
• And both that and "somewhat" seem slightly more cautious vs Powell's prepared comments opening the Nov press conference: "There is significant uncertainty around that level of [sufficiently restrictive rates]. Even so, we still have some ways to go, and incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected."
• Powell's likely one of the "various" participants - he said at the presser that the data since September's Dots "do suggest to me that we may ultimately move to higher levels than we thought", though "that level is very uncertain".
• The 2023 Dot had looked likely to be raised from 4.6% to 4.9% with risks that it would exceed 5%. With the language employed in the minutes appearing deliberate (perhaps even massaged after the Oct CPI reading?), the bar is set a little higher to get a >5% terminal Dot at next month's meeting.