Federal Open Market Committee (FOMC) Minutes
This morning has no relevant economic data for the markets to digest, but we do have the afternoon release of last month’s FOMC meeting minutes to watch. They will be released at 2:00 PM ET, so if there is a reaction to them it will come during mid-afternoon trading. Market participants will be looking for insight into the Fed’s thought process on economic growth, potential hurdles, inflation and expected monetary policy moves. If there are growing concerns about the strength of our economy and the need for further hikes to key short-term interest rates, the bond market should respond favorably. We have also recently heard discussion on the unwinding process of the Fed’s balance sheet that swelled during the economic stimulus days. It will be interesting to see if the Fed is considering making significant changes to that process. Any action that slows the process of shedding holdings should also be taken as favorable news for bonds and mortgage rates.