Special Fed Summary: Broke-Back Camels and Baby Black Swans

Fed Minutes-No Surprises, New Priorities

CONTENTS

1. In Summary

2. INFLATION (data), INFLATION (data), INFLATION (data)

3. THEY GOT LUCKY AND THEY KNOW IT

4. READING POWELL’S MIND

5. CAMEL BACKS AND BLACK SWANS

6. THE INFLATION TARGET WILL LIKELY GO HIGHER

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In Summary

1. It was the most dovish in 2 years- see chart below

2. There was no “pause” talk of note- only stated once in the whole meeting

3. The biggest debate is 25 vs 50 bps- and that is mostly 25 bps winning

4. The biggest agreement was in raising the terminal rate by 25 bps. to 5.25%

Bottom line: nothing really new. Slowly higher for longer until inflation stops.

BBG sentiment model: most dovish minutes in two years…ZEROHEDGE

INFLATION (data), INFLATION (data), INFLATION (data)

The key remains as we opined the last 6 months off and on: They are not worried about the economy, just the inflation now. Until something breaks that is hi-profile and visible they will keep raising until the data shows inflation down.

Which data? It does not matter if the short term “real time” inflationary data is lower (it is) they are staying with the slower-moving but more reliable (in their opinion) data to make the case.

Bullion & Boobs 🪙 @BoobsBullion

FOMC minutes may not be as important as usual.. but Williams may be more important

THEY GOT LUCKY AND THEY KNOW IT

Here’s why we feel they must stick to the plan: Because they got lucky— which is not a knock on them actually. It’s what they do with that luck that matters