The world of credit market professionals was rocked last week, even those in the Home for Old Traders, by release of the Federal Reserve’s minutes from its April 27 meeting. A few civilians got a glimmer in minor changes in mortgage quotes, but even in global currency and stock markets, the Fed-shock passed quickly. In open ocean the wave from an undersea earthquake is invisible, a tsunami only when reaching shore. Each Fed meeting concludes with a single-page statement, and the April 27 one was benign, bi-lateral hedging appropriate after the GDP (gross domestic product) stall in the first quarter (Q1). Meeting minutes released three weeks later run to a dozen pages describing the internal discussion. Opinions of participants are weighted by numbers (some, a few, several, many...) but anonymous, hence hard to tell whether wing-nuts had a big day signifying nothing or a consensus formed around the Chair. On Wednesday these minutes hit hard (see charts below), but 48 hou...
- The Federal Reserve released minutes from its April 27 meeting, which indicated that current economic growth is unsustainable and hinted toward a rate hike in June.
- However, with current global economic instability, it's unclear whether the Fed will raise rates in June.
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