FOMC Minutes Talk Up Modest Growth... Downplays QE3

The FOMC has released its minutes from the March 13, 2012 FOMC meeting discussing the developments in financial markets and the Federal Reserve’s balance sheet.  The forecast for 2013 and 2014 time tables has not changed, but there should have been no expectations that the wording would be much differently.  All in all, the notion of QE3 is missing here and that is dragging on stocks.

On the open market transactions and operations it noted, “By unanimous vote, the Committee ratified the Desk’s domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System’s account over the intermeeting period.”

The FOMC noted that economic activity was expanding moderately, labor market conditions continued to improve, the unemployment rate declined further (still elevated), overall consumer price inflation was relatively subdued but more recently it saw that crude oil and gasoline prices increased substantially, and that measures of long-run inflation expectations remained stable.

More notes were that manufacturing production increased considerably in January, households saw that real disposable income increased, housing market activity improved somewhat, real business expenditures on equipment and software rose at a notably slower pace, real defense expenditures continued to step down, and the U.S. international trade deficit widened.  The Fed even noted some basic increases out of purchasing manager activity in Europe.

As a reminder, these minutes are roughly three weeks old.

FULL MINUTES