The following are brief expectations for today's FOMC minutes from the November meeting as compiled from the research notes of Barclays, SEB, and Bank of America Global Research.
Barclays: In the minutes to the November FOMC meeting, we will pay special attention to participants’ views on balance sheet policies and whether any changes might be in store for December. In our view, the minutes are likely to indicate that the FOMC took comfort from the incoming data flow at the November meeting, which signaled the economy retained momentum heading into year end, and still-accommodative financial conditions following the election outcome. As a result, we expect the minutes to show that most FOMC members feel comfortable with existing balance sheet policy, though an increase in the duration of Treasury purchases or increase in the monthly pace of purchases could occur should the outlook darken.
SEB: Look out for the discussion over 1) the Fed’s asset purchases which, according to Powell, touched upon ways the Fed can shift the parameters in terms of composition, duration, size and life of the program, 2) clearer guidance on the development of asset purchases going forward and 3) the Fed’s emergency lending programs, which we now know will, with some exceptions, be terminated by year-end and if members had any views on how such a possibility would affect Fed policy. We expect members to express concerns over the virus spread and lack of new fiscal stimulus, while acknowledging the faster than expected recovery in Q3.
BofA: We will be paying attention to 1) what is the likely change to the B/S program-WAM extension or size, for example; 2) how much of a consensus is there within the FOMC to make a change; 3) what are the conditions that would need to be met to justify a change -economic data and/or market measures. The minutes will dictate whether or not to expect a change in the upcoming December meeting...We also expect further discussion about the new flexible average inflation regime (FAIT). And, of course, Fed officials will discuss the outlook, noting some of the better recent data but concerns about the path of the virus.