Redacted Version Of The February 2017 FOMC Statement

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Comments

The FOMC holds, but deludes itself that it is still accommodative.

The economy is growing well now, and in general, those who want to work can find work.

Maybe policy should be tighter. The key question to me is whether lower leverage at the banks was a reason for ultra-loose policy.

The change of the FOMC’s view is that inflation is higher. Equities are stable and bonds fall a little. Commodity prices rise and the dollar weakens.

The FOMC says that any future change to policy is contingent on almost everything.

The global economy is growing, inflation is rising globally, the dollar is rising, and the 30-year Treasury has not moved all that much relative to all of that. My guess is that the FOMC could get the Fed funds rate up to 2% if they want to invert the yield curve. A rising dollar will slow the economy and inflation somewhat.

Aside from that, I am looking for what might blow up. Maybe some country borrowing too much in dollars? Tightening cycles almost always end with a bang.