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  • FOMC Minutes

    *FED TAPER LIKELY IN COMING MONTHS ON BETTER DATA, MINUTES SHOW
    *MOST FOMC PARTICIPANTS SAID IOER CUT COULD BE WORTH CONSIDERING
    *FOMC SAW FISCAL `UNCERTAINTY' AS RISK TO CONSUMER CONFIDENCE
    *FOMC SAW CONSUMER SENTIMENT REMAINING `UNUSUALLY LOW'
    *FOMC SAW `SEVERAL SIGNIFICANT RISKS' REMAINING FOR ECONOMY
    *FOMC EXPECTED `ABATEMENT OF HEADWINDS' TO ECONOMIC EXPANSION
    *FOMC SAW LITTLE CHANGE IN ECONOMIC OUTLOOK SINCE SEPT. MEETING
    *FOMC SAW INFLATION MOVING BACK TOWARD 2% OVER MEDIUM TERM
    *FOMC SAW DOWNSIDE RISKS TO ECONOMY, LABOR MARKET `DIMINISHED'
    *FED POLICY MAKERS EXPECTED `ECONOMIC GROWTH WOULD PICK UP'
    *FOMC SAW FISCAL POLICY `RESTRAINING ECONOMIC GROWTH'
    *FOMC SAW RECOVERY IN HOUSING AS HAVING `SLOWED SOMEWHAT'
    *FED POLICY MAKERS SAW `FURTHER IMPROVEMENT' IN LABOR MARKET
    *FOMC SAW ECONOMY `CONTINUING TO EXPAND AT A MODERATE PACE'
     
    Nothing really exciting.  Based on the Fed minutes it’s pretty clear that they want to get out of QE, but have absolutely no idea how to do that.  One thing is certain, there is no way they were going to tip their hat before seeing the next employment report on Dec 6th.  Going into this, we felt like the right side of the trade was to be short mortgages as we’ve seen a remarkable run by MBS over the past week, placing all of the risk to the downside.  We’ve seen some selling in mortgages post-Fed, but prices are holding in relatively well.  We think 2.795% on the ten year is good support and will look to add there.
    Nov 20 2013