After hearing from Bernanke and Dudley in speeches AFTER the Sept 21st FOMC meeting where they set the stage for QE-Dos, today’s minutes are somewhat old news in terms of the likelihood of it happening and what the catalyst will be. What is clear from speeches after this meeting is the Fed will not wait for another leg lower in the economy before acting and will respond instead to the lack of improvement from current levels. “Many participants noted that if economic growth remained too slow to make satisfactory progress toward reducing the unemployment rate or if inflation continued to come in below levels consistent with the FOMC’s dual mandate, it would be appropriate to provide additional monetary policy accommodation…However, others thought that additional accommodation would be warranted only if the outlook worsened…” The latter seem to be in the minority as was Hoenig who wants none of this.
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