Housing was perking up at the start of the fourth quarter, but recent data aren't as encouraging as the industry heads into the quieter selling season. Aside from the mortgage-rate jump on speculation around inflationary policies under Trump, residential real estate is suffering from a lack of inventory, particularly at the lower end of the price range.
This "relatively soon" phrasing is what Chair Yellen teed up during her Nov. 17 congressional testimony before the Joint Economic Committee. Economist Vincent Reinhart had said before the minutes' release that he expected to see the document reflect a consensus view on this, given that Yellen felt comfortable enough to shift from language that focused more on a delay in tightening.
Pantheon's Ian Shepherdson says in a post-minutes note that next year we'll have a "real-world, real-time experiment" to see how much slack there really is in the market. "If the Trump stimulus is large, we'll find out quite quickly, and in our view it won't be pretty," he said.
The Fed got some heat from economists and other Fed watchers for playing up the increase in the participation rate while not making enough of this caveat. See related story: bloom.bg/2egeLKa...
Count Vice Chair Stan Fischer as one of those seeing inflation firming toward the 2 percent goal, per his remarks this week. Worth noting that the Fed's preferred gauge of price growth is still just at 1.2 percent despite some inching upward of late.
Appears to have been a hearty debate around labor force participation and what it means -- a key to understanding the unique forces at work in the economy more than seven years after the recession's end. This rich paragraph gets at a lot of the disagreements: Do we have too much slack, or are workers too hard to come by? Are wages showing positive acceleration, or still far too sluggish? Is the glass half empty or half full?
The Baker Hughes weekly gauge of oil and gas rigs showed another increase Wednesday, but the 593 level (best since January) is still less than a third of its level two years ago.
Fed participants might still have been shaken by the pound's plunge in early October on the news that Prime Minister Theresa May had set a March deadline for Britain's exit from the European Union.
That 2 percent goal still is incredibly elusive. Mortgage rates spiked on speculation that President-elect Trump's economic policies will spark inflation, but we're still at about half the Fed's goal and consumer expectations remain historically low.