In this post, we will go through the structure of Fed minutes.

Introduction

The minutes of the Federal Open Market Committee (FOMC) meeting are released 3 weeks after the meeting and consists of a summary of the discussion of the meeting and the decisions taken. The FOMC meetins is held 8 times a year.

The transcript (which is the more detailed than the minutes) are released with an interval of about 5 years. This long interval encourages the FOMC participants to be more open to exchange of views.

Attendance

This section lists the participants attending the meeting. The FOMC consists of 12 members. 7 of which are Board of Governors of the Fed Reserve System (known as The Board), the NY Federal Reserve Bank president and 4 of the remaining 11 Reserve Bank presidents (Federal Reserve Banks).

The current 12 Committee Members are:

Jerome H. Powell (Board of Governors, Chair)

The Chair of the Board of Governors on Feb 5th, 2018 and currently serving his second 4y term. Prior to public service, he worked as a lawyer and investment banker in New York City.

John C. Williams (New York, Vice Chair of FOMC)

The Vice Chair of the FOMC and New York Federal Reserve President.

Michal S. Barr (Board of Governors, Vice Chair for Supervision)

A member of the Board of Governors and also the Vice Chair for Supervision.

Michelle W. Bowman (Board of Governors)

A member of the Board of Governors.

Lisa D. Cook (Board of Governors)

A member of the Board of Governors.

Austan D. Goolsbee (Chicago)

President of the Federal Reserve Bank of Chicago

Patrick Harker (Philadelphia)

President of the Federal Reserve Bank of Philadelphia.

Philip N. Jefferson (Board of Governors)

A member of the Board of Governors.

Neel Kashkari (Minneapolis)

President of the Federal Reserve Bank of Minneapolis.

Lorie K. Logan (Dallas)

President of the Federal Reserve Bank of Dallas.

Christopher J. Waller (Board of Governors)

A member of the Board of Governors.

Others

Roberto Perli (Manager)

Manager of the System Open Market Account (SOMA).

Developments in Financial Markets and Open Market Operations

The manager of SOMA will first review the developments in the financial markets.

A review of:

• Asset Prices
• Nominal Treasury Yields
• Equity Prices
• Credit Spreads
• Trade-Weighted Value of the Dollar
• Implied Volatility levels
• Treasury Market Liquidity

Next participants assess the response to the following surveys:

• Survey of Primary Dealers
• Survey of Market Participants (SMP)

Participants also go through the market expectation of a rate hike/cut from the fed futures market and from the surveys, assessing the epectation of ON RRP balances in the Fed balance sheet and also to renew reciprocal currency arrangements with other countries.

Staff Review of the Economic Situation

Next the staff discussion of economic situation such as:

• Gross Domestic Product (GDP)
• Personal Consumption Expenditures (PCE)
• Senior Loan Officer Survey on Bank Lending Practices (SLOOS)
• Nonfarm Payroll Employment (Establishment Survey)
• Job Openings and Labor Turnover Survey (JOLTS)
• Employment Cost Index (ECI)
• Foreign Economies

Staff Review of the Financial Situation

Next the staff discussion of financial situation such as:

• Broad Equity Indexes
• VIX Index
• Market implied path for Fed Funds rate
• Nominal Treasury Yields
• Foreign Financial Markets
• Commercial Paper (CP)
• Negotiable Certificates of Deposit (NCDs)
• ON Funding Markets
• REPO Markets
• Corporate Bonds
• Commerical Real Estate (CRE) Loans
• Commerical Mortgage-Backed Securities (CMBS)
• Residential Mortgage Rates
• NonFinancial Loans and Bonds Issuance
• Commerical and Industrial (C&I) Loans

Staff Economic Outlook

• Real GDP Growth
• Unemployment Rate Forecast
• Core PCE Inflation Forecast
• PCE Inflation Forecast

Participants’ Views on Current Conditions and the Economic Outlook

Same as staff’s view on Economic/Financial Situation and Economic Outlook.

Committee Policy Actions

The FOMC directs the SOMA desk to:

• Undertake open market operations as necessary to maintain the federal funds rate in a target range of 5 to 5.25 percent.
• Conduct standing overnight repurchase agreement operations with a minimum bid rate of 5.25 percent and with an aggregate operation limit of $500 billion.
• Conduct standing overnight reverse repurchase agreement operations at an offering rate of 5.05 percent and with a per-counterparty limit of $160 billion per day.
• Roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $60 billion per month.
• Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• Reinvest into agency mortgage-backed securities (MBS) the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency MBS received in each calendar month that exceeds a cap of $35 billion per month.
• Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons.
• Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions.

See Also

References

FAQs (FED)

About the FOMC

Meeting calendars, statements, and minutes

Survey of Primary Dealers

Survey of Market Participants