Highlights of the FOMC Minutes released Feb 17, 2016:
- A number of Fed officials saw inflation outlook more uncertain
- Most officials saw solid job market, several saw moderation
- A number of officials concerned by drag on US from China
- Most Fed officials saw inflation rising to 2% over the medium term
- Officials stressed timing of hikes would depend on data
- Most Fed officials saw moderate US growth
- Most officials saw inflation higher as oil and USD headwinds fade
- USD and oil unlikely to hold down inflation for long
- A number noted "large magnitude of changes in domestic financial conditions was difficult to reconcile" with eco data
- Minutes of the Jan. 26-27 policy meeting
Sounds like most officials were ready to admit that the risks are higher but they still weren't ready to back off forecasts.
I see it more as a 'wait-and-see' stance than backing away from hikes for the rest of the year. If stocks perk back up and oil flattens out, there's a good chance that markets are underestimating the chance the Fed will hike again.
This is a key line:
"Participants judged that the overall implication of these developments for the outlook for domestic economic activity was unclear, but they agreed that uncertainty had increased, and many saw these developments as increasing the downside risks to the outlook," the Minutes said.