The Federal Reserve has released the minutes from the October FOMC meeting. The report took into account the increased slowdown risks from China, Europe and Japan. One takeaway is that the Fed is not in a rush to raise interest rates, but this is nothing the Fed has not said before. The December FOMC statement looks to add some clarification to the timing of policy changes with both the Fed forecasts and the chair press conference.

Janet Yellen and the Fed chose not to comment on the market volatility and more importantly global developments. It seems that there was a fear that any real references to these global developments could overstate their concerns and potentially cause a scare.

While near-term inflation has been running under the goal, the Fed still somehow sees inflation moving toward its 2% goal in the medium term. Another economic boost could be coming, as the drop in gasoline prices is seen as boosting near-term consumer spending.

The Fed stated in its minutes:

Total U.S. consumer price inflation, as measured by the PCE price index, was about 1-1/2 percent over the 12 months ending in August. Over the 12 months ending in September, both the consumer price index (CPI) and the CPI excluding food and energy prices rose about 1-3/4 percent. Consumer energy prices declined further in September, largely reflecting continued declines in retail gasoline prices, and survey data suggested gasoline prices fell further over the first few weeks of October. Consumer food prices rose solidly in recent months. Near-term inflation expectations from the Michigan survey declined in September and early October, while longer-term inflation expectations in the survey were little changed.

The trade deficit narrowed slightly in August. Following large increases in July, both exports and imports grew only modestly, with gains concentrated in capital goods excluding automotive products.

The FOMC minutes said:

Concerns about the global economic outlook apparently helped to prompt a sharp pullback from risky assets in the United States, but prices of those assets subsequently reversed much of their declines by the end of the intermeeting period. … Worries about a possible spread of Ebola also appeared to weigh on market sentiment somewhat at times.

It is also worth noting that only one official had opposed the bond buying program in October.

Stocks remain under pressure, with the S&P 500 down six points and the DJIA down 35 points after the release of the minutes, although they had been higher around the release of the minutes.

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