Tl;dr: The Minutes echoed the hawkish tone of the statement and press conference:  “a majority” of Fed officials saw one more rate increase “would likely be appropriate”.

The Bloomberg Intelligence US interest-rate strategy team’s NLP model of the minutes showed the Fed was somewhat more dovish than at the July meeting, with the exponential moving average declining back to levels experienced for the June FOMC gathering.

“Overall, we didn’t see many surprises in the minutes,” BI Chief Interest Rate Strategist Ira Jersey says.

“With the model suggesting the Fed is neutral, another pause at the November meeting seems most likely unless tomorrow’s CPI data is shockingly high.”

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Since The FOMC meeting on September 20th, when the various Fed members dropped their now infamously hawkish SEP (dot plot), things have gone just a little bit turbo across asset-classes.

The dollar is marginally stronger... and everything else is lower in price (with bonds and gold leading the charge lower)...

Source: Bloomberg

The 'higher for longer' narrative gained ground since the hawkish statement with the STIRs curve up around 10bps...

Source: Bloomberg

Interestingly the long-end of the yield have risen dramatically in the weeks since the last FOMC meeting (and we suspect spooked Fed members). Over the same period, 2Y Yields are down 8bps (30Y +33bps)...

Source: Bloomberg

That's a dramatic steepening of the curve...

Source: Bloomberg

And finally, financial conditions have steepened notably in the weeks since the FOMC (though the last 2 days of flight to safety post-Israel has eased it back a little)...

Source: Bloomberg

Since the hawkish SEP, various Fed speakers have attempted - albeit very modestly - to tamp down the tone (because we suspect the rampant surge in long-end yields spooked some of them). Will the Minutes attempt to do the same with cherry-picked comments?

In fact, Powell was actually fairly balanced in his open remarks at the press conference, so we wouldn’t be surprised if the minutes had more statements of risk, fitting with the post-FOMC FedSpeak.

Arguably, the Minutes suggest there is more of a two-sided argument for policy action (pause vs more hikes - not hikes vs cuts) than the tone at the statement and press conference, while most participants continued to see upside risks to inflation.

Read the full minutes below: