Five things that could move the markets in the Fed's minutes release today

The Federal Reserve will release minutes Wednesday of its meeting in early May that did not see an interest rate increase but apparently did feature some important in-depth discussion about the future of monetary policy.

That may not sound very exciting on the surface, but market participants will be poring through the Federal Open Market Committee meeting summary for clues about where the central bank is heading.

In Fedspeak, what seems like an innocuous add or drop in verbiage from one statement to the next can unlock a torrent of new information.

Krishna Guha, head of global policy and central bank strategy Evercore ISI, offers a helpful guide on what will gather investor attention:

1. The economy, specifically the FOMC's drop of the phrase that the outlook "has strengthened." Guha thinks Fed officials still are optimistic "though they might have pared back their assessment a bit between the March and May meetings on weaker Q1 growth ex-US and possible drag from trade-related uncertainty."

2. Including the word "symmetric" in the Fed's approach to its 2 percent inflation target jarred some who thought it meant the committee might let inflation go beyond the target and allow the economy to rev a little hotter than normal. In Guha's view, "to the extent that the minutes take even a baby step forward in clarifying this it will have important implications for the likely path of inflation and rates."

3. In the same vein, investors will be looking to confirm that the new-look Fed is one that will be more comfortable with above-target inflation. "We think that many, perhaps most FOMC participants actually hold this view though it is unclear whether Chair [Jerome] Powell would be comfortable making even a modest deliberate inflation overshoot official Fed policy."

4. Some long-standing characterizations of policy, specifically that it "remains accommodative" and that the fed funds rate likely will stay "below levels that are expected to prevail in the longer run," are likely on their way out. The importance there will be whether officials indicate that a new policy regime is coming. However, Guha said incoming committee members could take a more dovish policy view, setting up possible conflicts ahead.

5. Similarly, there's likely to be a debate ahead about how far the Fed has to go to get to a "neutral rate" where policy is neither restrictive nor overly accommodative. If the minutes indicate that the neutral rate is close, the market will see that as dovish.

As things stand, the Fed has indicated two more rate hikes are on the way this year with three more on the way for 2019. Traders in the fed funds market largely agree, though the probability of an additional rate hike before the end of the year recently went over 50 percent. As of Wednesday morning, though, the chance of a total of four hikes this year had fallen to 44 percent, according to the CME.

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