TD Securities’ global strategy team expects the April FOMC minutes to clarify how many participants supported removing the easing bias and how divided the committee was after some hawkish dissents. They argue that the continued high CPI and wages since April have shifted the dynamics towards hawkish, and support their call for a formal change in stance at the June meeting.

FOMC minutes containing details on the bias debate

“The April FOMC minutes will shed more light on the discussion on changes to the lenient stance of the statement.”

“Based on the recent Fedspeak, we believe ‘many’ participants supported abandoning this bias, to which three voting members expressed no opposition.”

“While strong CPI and wages reports since the April meeting make the minutes a bit stale, we believe the dynamics are shifting with the hawks.”

“There was already significant support for abandoning the bias in April, and the latest data releases only confirm this, which motivates our call for them to finally make the change in June.”

“On Wednesday, attention will focus on the afternoon 20-year bond auction as the market tests investor appetite for duration.”

(This article was created with the lend a hand of an artificial intelligence tool and has been reviewed by an editor.)