The Missing Pieces From Fed Minutes On The Bigger Move Debate

Authored by Ven Ram, Bloomberg cross-asset-class strategist,

There is an interesting jigsaw to be solved from Wednesday’s release of the Fed minutes of its meeting earlier this month.

Here’s what the minutes showed:

A few participants stated that they favored raising the target range for the federal funds rate 50 basis points at this meeting or that they could have supported raising the target by that amount.

The participants favoring a 50-basis point increase noted that a larger increase would more quickly bring the target range close to the levels they believed would achieve a sufficiently restrictive stance, taking into account their views of the risks to achieving price stability in a timely way.

However, the statement after the decision on Feb. 1 showed that there was no dissent.

What gives?

There are at least eight hawks who count as “participants”: Neel Kashkari, James Bullard, Chair Jerome Powell, Michelle Bowman, Christopher Waller, Loretta Mester, Mary Daly (based on her recent statements) and Esther George.

The Fed’s immediate post-meeting statement showed there was no dissent from Kashkari, Powell, Bowman and Waller.

So all those “participants” who sought a bigger move were the ones not voting.

That means at least two or more of Bullard, Mester, Daly and George.