Most European Central Bank policy makers judged that buying government debt was the only option big enough to fight the threat of deflation when they met last month, an official account of the debate shows.
If the collective consensus is for an adjustment in policy rate at the June meeting, Fed officials have more communication work to do to help market participants understand that. Otherwise, a September move looks more likely.
As we noted in this morning’s FOMC minutes preview, traders were poised for the Federal Reserve to pave the way to potential rate hike as soon as June this year. As it turned out, the minutes did show a surprisingly dovish Fed, and as a result, the world’s reserve currency is seeing a modest dip in the immediate wake of the release.