Minutes to the Federal Reserve's Aug. 5 meeting indicate that meeting participants were concerned about risks to both growth and inflation, with no particularly strong leaning either way. Tipping the scale a bit were the following two passages:
"Participants expressed significant concerns about the upside risks to inflation, especially the risk that persistently high headline inflation could result in an unmooring of long-run inflation expectations." (Page 6, left side)
"Although members generally anticipated that the next policy move would likely be a tightening, the timing and extent of any change in policy stance would depend on evolving economic and financial developments and the implications for the outlook for economic growth and inflation." (Page 6, right side)
That the Fed saw rate hikes as more likely than rate cuts shows the Fed's leaning.
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Tony Crescenzi Blog Watch the FDIC "Problem List" 8/26/2008 2:06 PM EDT The number of banks under duress are increasing.
Tony Crescenzi Blog FOMC Minutes on Tap 8/26/2008 1:02 PM EDT The minutes of the Aug. 5 should provide clarity on the prospects of a rate hike.
Tony Crescenzi Blog New Home Supply Plunges 8/26/2008 10:39 AM EDT This appears to be the largest monthly drop on record.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market,
first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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