It is always interesting when the FOMC Minutes are released to the public. The dialogue between FED members is instructive in detailing current economic conditions as well as the future of FED policy. Today’s release will be no different, as the stated policy of “gradual tightening” will be put under the microscope by traders and investors.

FOMC Minutes: Things To Watch For

The verbiage used by central bankers is purposefully vague, as to not send markets into a panic. Definitive statements are typically hard to find. In releases like the FOMC Minutes, tone is everything.

We know that the FOMC voted unanimously to raise rates at the September FED meeting. We also know that the FED’s Dot Plot for the next 18 months shows a December rate hike and at least three more slated for 2019. Here are a few things that we don’t yet know, that today’s FOMC Minutes may shed some light on:

• FED concerns over a prolonged U.S./China trade standoff and the impact of future tariffs on the U.S. economy
• The FED’s stance toward the new USMCA agreement
• An official outlook on U.S. inflation in relation to the FED’s long-term 2% target
• The FED’s opinion on rising bond yields and the condition of the debt market

For now, the consensus among financial analysts is that the Greenback will strengthen over the next 18 months while U.S. equities enter correction. In fact, most mainstream financial media outlets are suggesting the FED is trying to engineer a “soft landing” for the U.S. economy anticipating a coming downturn. Perhaps today’s FOMC Minutes will confirm or deny the growing sense of skepticism toward the U.S. economy and equities markets.

USD Index Futures

The Greenback has posted a nice session. December USD Index futures are on the bull, rallying near the 95.000 handle.

Overview: Earlier in the session, the USD Index rallied above the 38% Current Wave Retracement (94.870), moving north of 95.000. We will see if the positive sentiment continues in the wake of the FOMC Minutes.