The FOMC Minutes from the September FED meeting has been released to the public and the markets are reacting. As projected, the FED is sticking to a flexible, data-dependent policy. Thus far, traders have made an about-face at what they have heard, sending the U.S. indices sideways and the Greenback to the bear.

FOMC Minutes: Highlights And Recap

Once again the central theme of “uncertainty” has defined the FOMC Minutes. Let’s take a look at a few of the highlights from today’s release:

• “Participants generally judged that downside risks to the outlook for economic activity had increased since the July meeting, due to trade policy uncertainty and conditions abroad.”
• “The probability of a medium-term recession has increased notably in recent months.”
• “Softness in business investment and manufacturing so far this year was seen as pointing to the possibility of a more substantial slowing of economic growth than the staff projected.”

Bottom Line: In September, the FOMC voted 7-3 to cut rates by ¼ point. While the 31 July meeting showed an emerging divide in the economic outlook, this was not the case in September. Although the final vote wasn’t unanimous, members agreed that the U.S. economy is approaching a turning point.

Following the FOMC Minutes becoming public, the markets have begun pricing in another ¼ point cut for the 30 October FED meeting. At this point, the DJIA is holding on to 200+ gains and the USD is losing ground vs the majors.