1 00:00:00,080 --> 00:00:01,960 Speaker 1: You know, I just wanna again. I want to highlight 2 00:00:02,040 --> 00:00:04,800 Speaker 1: this a two year note. They got hit pretty hard 3 00:00:04,960 --> 00:00:06,680 Speaker 1: coming back a bit. It was that the yield was 4 00:00:06,760 --> 00:00:08,640 Speaker 1: up over zero point eight eight. It's back down to 5 00:00:08,720 --> 00:00:11,520 Speaker 1: zero point eight seven, but recently it's been trading around 6 00:00:11,880 --> 00:00:14,480 Speaker 1: zero point eight two. A couple of sentences really important 7 00:00:14,480 --> 00:00:16,560 Speaker 1: in these f MC minutes, a story written up by 8 00:00:16,760 --> 00:00:20,360 Speaker 1: two of our terrific UH Federal Reserve Team members in 9 00:00:20,480 --> 00:00:24,560 Speaker 1: Washington see Chris contin and Craig torres Participants expressed a 10 00:00:24,680 --> 00:00:27,560 Speaker 1: range of views about the likelihood that incoming information would 11 00:00:27,600 --> 00:00:31,000 Speaker 1: make it appropriate to adjust the stance of Polly the policy. 12 00:00:31,040 --> 00:00:33,680 Speaker 1: At the time of the next meeting, most had agreed 13 00:00:33,720 --> 00:00:36,280 Speaker 1: that if incoming data supported the red hike, they would 14 00:00:36,320 --> 00:00:39,040 Speaker 1: go for it. Referring to the June meeting, officials generally 15 00:00:39,120 --> 00:00:42,760 Speaker 1: judged it appropriate to leave their policies their options open, 16 00:00:42,760 --> 00:00:45,720 Speaker 1: excuse me, and maintain the flexibility to make the decision 17 00:00:45,720 --> 00:00:48,000 Speaker 1: based on the economy. Mat Bosler, you come in now, 18 00:00:48,400 --> 00:00:51,320 Speaker 1: UH New York based member of our terrific Federal Reserve Team. 19 00:00:51,880 --> 00:00:54,080 Speaker 1: You're actually reading through the minutes right now? What's hopping 20 00:00:54,080 --> 00:00:56,800 Speaker 1: out at you? Yeah? So I think the main sentence 21 00:00:56,840 --> 00:00:59,440 Speaker 1: that jumps out at me here is several participants were 22 00:00:59,440 --> 00:01:03,680 Speaker 1: concerned that the incoming information might not provide sufficiently clear 23 00:01:03,760 --> 00:01:07,080 Speaker 1: signals to determine by mid June whether an increase in 24 00:01:07,120 --> 00:01:09,400 Speaker 1: the target range for the federal funds rate would be warranted. 25 00:01:09,480 --> 00:01:11,920 Speaker 1: So yes, they did say it was likely if the 26 00:01:11,959 --> 00:01:15,440 Speaker 1: economy did what they wanted. But it sounds like several, uh, 27 00:01:15,600 --> 00:01:18,360 Speaker 1: we're concerned that they might not get the info they needed, 28 00:01:18,600 --> 00:01:21,520 Speaker 1: and so that to me kind of sounds like, um, 29 00:01:21,560 --> 00:01:23,839 Speaker 1: you know, maybe we need to wait, uh and hear 30 00:01:23,959 --> 00:01:28,039 Speaker 1: some more from Stanley Fisher who is speaking tomorrow, Bill Dudley, 31 00:01:28,080 --> 00:01:30,520 Speaker 1: the New York Fed President, who is also speaking tomorrow, 32 00:01:30,800 --> 00:01:33,479 Speaker 1: to see, uh, sort of what they think about how 33 00:01:33,520 --> 00:01:35,840 Speaker 1: the data have been coming in. A nice big move 34 00:01:35,880 --> 00:01:38,880 Speaker 1: in the dollar against the agen met bos to tell 35 00:01:38,959 --> 00:01:41,680 Speaker 1: us about dollar strength right now. Yeah, so you know 36 00:01:41,720 --> 00:01:44,480 Speaker 1: that was something that was was definitely on their radar 37 00:01:44,520 --> 00:01:47,160 Speaker 1: a lot and concerning at the beginning of the year, 38 00:01:47,280 --> 00:01:51,040 Speaker 1: and um, the dollar came down quite a bit and 39 00:01:51,560 --> 00:01:54,080 Speaker 1: just in the last few days we've seen that strengthening again. 40 00:01:54,760 --> 00:01:58,160 Speaker 1: We don't see many references to the dollar in the 41 00:01:58,200 --> 00:02:00,520 Speaker 1: minutes here, so that I think is definitely only something 42 00:02:00,560 --> 00:02:03,760 Speaker 1: that they're feeling a little bit better about. But of course, uh, 43 00:02:03,800 --> 00:02:06,120 Speaker 1: you know, the more we talk about FED rate hikes, 44 00:02:06,160 --> 00:02:08,280 Speaker 1: the more the risk that goes back up and we 45 00:02:08,600 --> 00:02:12,440 Speaker 1: you know, get back into that that positive feedback loop again, 46 00:02:13,040 --> 00:02:15,560 Speaker 1: and then it becomes a question of when weather rather 47 00:02:15,600 --> 00:02:17,840 Speaker 1: than whether, I mean, I'm looking at the world, is 48 00:02:17,919 --> 00:02:21,040 Speaker 1: just rate probability at w I RP functional Bloomberg turnal. 49 00:02:21,240 --> 00:02:23,840 Speaker 1: It's now as far as July, which seems to be 50 00:02:23,880 --> 00:02:27,880 Speaker 1: in play for some reason, thirty three percent chance of 51 00:02:27,919 --> 00:02:30,920 Speaker 1: a rate increase by July. So it does go to 52 00:02:30,919 --> 00:02:32,720 Speaker 1: show you, I mean, it was what you're seeing in 53 00:02:33,160 --> 00:02:36,680 Speaker 1: the Minnesota consistent with that idea. Can I just break 54 00:02:36,680 --> 00:02:38,560 Speaker 1: in and just tell you what happened to oil just 55 00:02:38,600 --> 00:02:41,160 Speaker 1: as the f o MC meeting minutes were released. You 56 00:02:41,160 --> 00:02:44,000 Speaker 1: saw that we've had oil move higher today, the West 57 00:02:44,040 --> 00:02:47,920 Speaker 1: Texas Intermediate contract trading higher than about forty eight dollars 58 00:02:48,040 --> 00:02:51,080 Speaker 1: eighty cents now a drop of about a tenth percent. 59 00:02:51,120 --> 00:02:54,080 Speaker 1: But you can just watch it just tick lower as 60 00:02:54,160 --> 00:02:57,200 Speaker 1: the f o MC meeting minutes were released to lower 61 00:02:57,240 --> 00:03:00,480 Speaker 1: oil prices. And I guess that also means we'll come 62 00:03:00,480 --> 00:03:02,520 Speaker 1: back and look at bond prices. I also just want 63 00:03:02,560 --> 00:03:04,600 Speaker 1: to point out real quickly this line. It says several 64 00:03:04,639 --> 00:03:07,480 Speaker 1: f MC participants judged that the risk to the economic 65 00:03:07,520 --> 00:03:10,440 Speaker 1: outlook we're now roughly balanced. So that's something that we've 66 00:03:10,480 --> 00:03:14,239 Speaker 1: been wondering about because they stopped including a balance of 67 00:03:14,320 --> 00:03:17,120 Speaker 1: risk assessment and the MINT in the statement. But here 68 00:03:17,120 --> 00:03:19,560 Speaker 1: in the minutes, it's saying that what does that mean. Well, 69 00:03:19,639 --> 00:03:22,360 Speaker 1: it means that they no longer see downside risks as 70 00:03:22,440 --> 00:03:25,440 Speaker 1: necessarily outweighing upside risks, and that is sort of seen 71 00:03:25,480 --> 00:03:30,639 Speaker 1: in the markets as a uh, prerequisite for further rate hikes. 72 00:03:31,400 --> 00:03:35,080 Speaker 1: So uh, but does this you know, get ready for 73 00:03:35,160 --> 00:03:37,320 Speaker 1: June well, and everybody can weigh in. I think to me, 74 00:03:37,640 --> 00:03:39,880 Speaker 1: I'll just say that you can get ready for June PM. 75 00:03:39,920 --> 00:03:41,520 Speaker 1: But this is what they have been saying. Seems to 76 00:03:41,520 --> 00:03:43,640 Speaker 1: me the door is open. When the Federal Reserve says 77 00:03:43,720 --> 00:03:46,000 Speaker 1: it's a live meeting, what they mean is we're going 78 00:03:46,040 --> 00:03:48,960 Speaker 1: to seriously debate it. It doesn't mean they're saying we 79 00:03:49,000 --> 00:03:51,520 Speaker 1: think a rate hike is necessarily likely. They're gonna look 80 00:03:51,520 --> 00:03:54,600 Speaker 1: at all the data coming in. This supports Matt. Seems 81 00:03:54,640 --> 00:03:57,360 Speaker 1: to me that this is going to be a live meeting, 82 00:03:57,800 --> 00:03:59,880 Speaker 1: but there's going to probably be a pretty hot to 83 00:04:00,040 --> 00:04:02,440 Speaker 1: bait about, and we're gonna have their jobs. But they're 84 00:04:02,440 --> 00:04:05,040 Speaker 1: already having the debate in public, right John Williams, president 85 00:04:05,040 --> 00:04:08,000 Speaker 1: of the Federal Reserve Bank of San Francisco's already talked 86 00:04:08,000 --> 00:04:11,360 Speaker 1: about sure, sure, sure, but they're not sitting down at 87 00:04:11,360 --> 00:04:13,360 Speaker 1: a table as they do in Washington, d C. And 88 00:04:13,400 --> 00:04:15,560 Speaker 1: at that they really do debate. They put their views 89 00:04:15,600 --> 00:04:16,880 Speaker 1: on the table and then they have to come to 90 00:04:16,960 --> 00:04:18,600 Speaker 1: some kind of consensus. That's what's going to be the 91 00:04:18,680 --> 00:04:21,840 Speaker 1: question in June. Yeah, that's exactly right. So again it'll 92 00:04:21,839 --> 00:04:25,159 Speaker 1: be interesting to hear what Fisher and Dudley say tomorrow. Um, 93 00:04:25,200 --> 00:04:28,080 Speaker 1: and of course we still have a few more major 94 00:04:28,200 --> 00:04:32,080 Speaker 1: data releases. Remind our listeners why Stan Fisher and Bill 95 00:04:32,160 --> 00:04:36,240 Speaker 1: Dudley are so important. So these are the two outside 96 00:04:36,240 --> 00:04:38,200 Speaker 1: of Janet Yell in the FED chair who you really 97 00:04:38,240 --> 00:04:40,400 Speaker 1: need to listen to, because Stan Fisher is, of course 98 00:04:40,440 --> 00:04:43,679 Speaker 1: the vice chair. Bill Dudley is the New York Fed president. 99 00:04:43,720 --> 00:04:46,000 Speaker 1: He has he is the only regional bank president with 100 00:04:46,040 --> 00:04:48,880 Speaker 1: a permanent vote on the FMC. He gets to vote 101 00:04:48,880 --> 00:04:51,240 Speaker 1: every every year. Everyone else has to rotate. So those 102 00:04:51,240 --> 00:04:54,120 Speaker 1: are the really the key the three people, and and 103 00:04:54,160 --> 00:04:57,640 Speaker 1: they haven't spoken a lot lately, frankly about their views. 104 00:04:57,680 --> 00:05:00,320 Speaker 1: These other people who have been talking a lot about uh, 105 00:05:00,360 --> 00:05:03,160 Speaker 1: you know, potential rate hikes in June are more um 106 00:05:03,320 --> 00:05:05,640 Speaker 1: the regional fed presidents who are seen as slightly less 107 00:05:05,680 --> 00:05:10,960 Speaker 1: influential than that key inner circle. Dave Wilson, I'm just 108 00:05:11,040 --> 00:05:14,240 Speaker 1: looking back at the S and P five reminding myself. 109 00:05:14,960 --> 00:05:17,240 Speaker 1: You know, we've had a couple of instances where there 110 00:05:17,320 --> 00:05:20,120 Speaker 1: was real concern about rates going up. You look back 111 00:05:20,120 --> 00:05:22,240 Speaker 1: to August and you see stocks fell out of bed, 112 00:05:22,360 --> 00:05:27,000 Speaker 1: bounced back. You see January, same thing happen again, stocks 113 00:05:27,000 --> 00:05:29,760 Speaker 1: bounced back. So I suppose the question now as we 114 00:05:29,880 --> 00:05:33,839 Speaker 1: go into June, is are we headed for a third 115 00:05:33,960 --> 00:05:37,200 Speaker 1: time with that scenario playing out? Because we really have 116 00:05:37,360 --> 00:05:40,080 Speaker 1: seen you know, you look at the SMP five re 117 00:05:40,200 --> 00:05:43,280 Speaker 1: established itself in the range that you saw before the 118 00:05:43,320 --> 00:05:46,800 Speaker 1: first and the second moves down, and you know, we 119 00:05:46,839 --> 00:05:48,320 Speaker 1: get to the end of the week, it will be 120 00:05:48,360 --> 00:05:52,440 Speaker 1: a year since we've seen a new high for the index. 121 00:05:52,480 --> 00:05:54,360 Speaker 1: So you know, it kind of raises the question of 122 00:05:54,360 --> 00:05:58,560 Speaker 1: whether the bullmarket is even still in existence. But nonetheless, 123 00:05:58,640 --> 00:06:01,640 Speaker 1: I mean it is something to consider. Quick question, you 124 00:06:01,640 --> 00:06:03,400 Speaker 1: get about ten seconds, Matt Bows. Do you think there's 125 00:06:03,400 --> 00:06:06,120 Speaker 1: a greater risk of dissents at the next meeting. Oh yeah, 126 00:06:06,160 --> 00:06:10,240 Speaker 1: definitely on both sides, for the hiker against. That's right. 127 00:06:10,279 --> 00:06:13,719 Speaker 1: We'll see what happens. Okay. I want to thank you 128 00:06:13,760 --> 00:06:18,280 Speaker 1: both very much. Matt Bosler, Bloomberg News of Federal Reserve reporter, 129 00:06:18,360 --> 00:06:21,400 Speaker 1: and of course Dave Wilson Bloomberg Stocks comments to be 130 00:06:21,480 --> 00:06:24,440 Speaker 1: joining us in the next hour of taking Stock right 131 00:06:24,480 --> 00:06:25,960 Speaker 1: here on Bloomberg Radio.