FOMC Minutes Yield No Big Surprises

The minutes from the last FOMC meeting were released today, and here are some of the highlights of the comments:

• FOMC judged risk of prices not easing was 'predominant' worry, FOMC saw some risk of 'deterioration' in price expectations
  
• FOMC agreed sustained price 'moderation' not yet convincing
  
• Fed says housing activity likely to contract for several quarters, new home inventories "quite elevated"
  
• Fed says participants judged labor market remained "rather tight", especially for skilled workers
  
• Fed says inflation pressures may be sustained by resource use, energy and commodity prices, dollar drop
  
• FOMC saw housing as 'key source of uncertainty'
  
• FED says participants saw sustained moderation in core inflation not yet "convincingly demonstrated"
  
• FOMC anticipated core inflation to be 'relatively subdued'
  
• Fed says housing sector biggest downside growth risk, likely to remain drag on growth for some time
  
• Fed says rising mortgage delinquencies, subprime problems could crimp credit availability, housing demand
  
• Fed minutes say that downside risks to growth "more balanced" than at time of May FOMC meeting

Basically, they are repeating the same mantra, that inflation pressures are poised to ease though they have not yet done so in any meaningfully way. Also, that the downturn in the housing market remains the key risk to subpar economic growth. But as long as jobs are plentiful, consumer spending should be steady.