Federal Open Market Committee Minutes of the Board

Today the Fed releases minutes of its meeting that occurred three weeks ago. Why do we care and what should we look for?

The minutes reveal changes in monetary policy that can and will affect markets around the world. They contain all economic data that the Fed has compiled to make decisions on which direction to take interest rates. They also reveal whether any FOMC members voiced dissenting opinions...

This is what we look for: more and more dissent from current policy. The more dissent the more volatility. Depending on our exposure, volatility can work for us or against us, but either way, there will be volatility. The talk last time--released Nov 24--discussed asset sales, and there seemed to be disagreements as to whether that would be a smart decision in light of intentions to raise short term interest rates. Asset sales would undoubtedly affect longer term interest rates (10/30 year Treasuries).

A palatable solution to an exit strategy discussed was a combination of term deposits (paying interest on deposits at the regional banks) and reverse repo's (selling loans with the promise to buy them back in the future).

The Federal Reserve has a dual objective to maximize employment and have stable overall prices.

The new minutes will be out today at 2 pm est...