Interesting Reaction to FOMC Minutes

The minutes from the last FOMC meeting were just released, and the market experience a volatile reaction. The initial move was lower, as the market tested today's lows, but then it quickly reversed higher and snapped back all the way to break-even for the day.

Here is a quick summary of the comments:

• FOMC says growth, inflation pressures may ease gradually
• Lacker was the lone dissenter
• August rate decision was a close call
• Below potential growth may last for six quarters
• Past tightening may hold growth below potential
• Limited risk in deferring necessary tightening
• Considerable uncertainty about housing outlook
• Upside risk to inflation remains significant

From these comments, it appears the Fed was still focused on inflation and implying that they are merely pausing while awaiting more data. I believe that inflation has peaked and that they will not raise rates again.
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