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Bloomberg's Boesler Confirms Fed Open to June Rate Hike (Audio) · Bloomberg Intelligence

• 0:00
  Speaker 1: You know, I just wanna again. I want to highlight
• 0:02
  Speaker 1: this a two year note. They got hit pretty hard
• 0:04
  Speaker 1: coming back a bit. It was that the yield was
• 0:06
  Speaker 1: up over zero point eight eight. It's back down to
• 0:08
  Speaker 1: zero point eight seven, but recently it's been trading around
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  Speaker 1: zero point eight two. A couple of sentences really important
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  Speaker 1: in these f MC minutes, a story written up by
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  Speaker 1: two of our terrific UH Federal Reserve Team members in
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  Speaker 1: Washington see Chris contin and Craig torres Participants expressed a
• 0:24
  Speaker 1: range of views about the likelihood that incoming information would
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  Speaker 1: make it appropriate to adjust the stance of Polly the policy.
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  Speaker 1: At the time of the next meeting, most had agreed
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  Speaker 1: that if incoming data supported the red hike, they would
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  Speaker 1: go for it. Referring to the June meeting, officials generally
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  Speaker 1: judged it appropriate to leave their policies their options open,
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  Speaker 1: excuse me, and maintain the flexibility to make the decision
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  Speaker 1: based on the economy. Mat Bosler, you come in now,
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  Speaker 1: UH New York based member of our terrific Federal Reserve Team.
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  Speaker 1: You're actually reading through the minutes right now? What's hopping
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  Speaker 1: out at you? Yeah? So I think the main sentence
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  Speaker 1: that jumps out at me here is several participants were
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  Speaker 1: concerned that the incoming information might not provide sufficiently clear
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  Speaker 1: signals to determine by mid June whether an increase in
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  Speaker 1: the target range for the federal funds rate would be warranted.
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  Speaker 1: So yes, they did say it was likely if the
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  Speaker 1: economy did what they wanted. But it sounds like several, uh,
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  Speaker 1: we're concerned that they might not get the info they needed,
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  Speaker 1: and so that to me kind of sounds like, um,
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  Speaker 1: you know, maybe we need to wait, uh and hear
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  Speaker 1: some more from Stanley Fisher who is speaking tomorrow, Bill Dudley,
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  Speaker 1: the New York Fed President, who is also speaking tomorrow,
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  Speaker 1: to see, uh, sort of what they think about how
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  Speaker 1: the data have been coming in. A nice big move
• 1:35
  Speaker 1: in the dollar against the agen met bos to tell
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  Speaker 1: us about dollar strength right now. Yeah, so you know
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  Speaker 1: that was something that was was definitely on their radar
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  Speaker 1: a lot and concerning at the beginning of the year,
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  Speaker 1: and um, the dollar came down quite a bit and
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  Speaker 1: just in the last few days we've seen that strengthening again.
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  Speaker 1: We don't see many references to the dollar in the
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  Speaker 1: minutes here, so that I think is definitely only something
• 2:00
  Speaker 1: that they're feeling a little bit better about. But of course, uh,
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  Speaker 1: you know, the more we talk about FED rate hikes,
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  Speaker 1: the more the risk that goes back up and we
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  Speaker 1: you know, get back into that that positive feedback loop again,
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  Speaker 1: and then it becomes a question of when weather rather
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  Speaker 1: than whether, I mean, I'm looking at the world, is
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  Speaker 1: just rate probability at w I RP functional Bloomberg turnal.
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  Speaker 1: It's now as far as July, which seems to be
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  Speaker 1: in play for some reason, thirty three percent chance of
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  Speaker 1: a rate increase by July. So it does go to
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  Speaker 1: show you, I mean, it was what you're seeing in
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  Speaker 1: the Minnesota consistent with that idea. Can I just break
• 2:36
  Speaker 1: in and just tell you what happened to oil just
• 2:38
  Speaker 1: as the f o MC meeting minutes were released. You
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  Speaker 1: saw that we've had oil move higher today, the West
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  Speaker 1: Texas Intermediate contract trading higher than about forty eight dollars
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  Speaker 1: eighty cents now a drop of about a tenth percent.
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  Speaker 1: But you can just watch it just tick lower as
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  Speaker 1: the f o MC meeting minutes were released to lower
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  Speaker 1: oil prices. And I guess that also means we'll come
• 3:00
  Speaker 1: back and look at bond prices. I also just want
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  Speaker 1: to point out real quickly this line. It says several
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  Speaker 1: f MC participants judged that the risk to the economic
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  Speaker 1: outlook we're now roughly balanced. So that's something that we've
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  Speaker 1: been wondering about because they stopped including a balance of
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  Speaker 1: risk assessment and the MINT in the statement. But here
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  Speaker 1: in the minutes, it's saying that what does that mean. Well,
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  Speaker 1: it means that they no longer see downside risks as
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  Speaker 1: necessarily outweighing upside risks, and that is sort of seen
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  Speaker 1: in the markets as a uh, prerequisite for further rate hikes.
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  Speaker 1: So uh, but does this you know, get ready for
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  Speaker 1: June well, and everybody can weigh in. I think to me,
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  Speaker 1: I'll just say that you can get ready for June PM.
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  Speaker 1: But this is what they have been saying. Seems to
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  Speaker 1: me the door is open. When the Federal Reserve says
• 3:43
  Speaker 1: it's a live meeting, what they mean is we're going
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  Speaker 1: to seriously debate it. It doesn't mean they're saying we
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  Speaker 1: think a rate hike is necessarily likely. They're gonna look
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  Speaker 1: at all the data coming in. This supports Matt. Seems
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  Speaker 1: to me that this is going to be a live meeting,
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  Speaker 1: but there's going to probably be a pretty hot to
• 4:00
  Speaker 1: bait about, and we're gonna have their jobs. But they're
• 4:02
  Speaker 1: already having the debate in public, right John Williams, president
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  Speaker 1: of the Federal Reserve Bank of San Francisco's already talked
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  Speaker 1: about sure, sure, sure, but they're not sitting down at
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  Speaker 1: a table as they do in Washington, d C. And
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  Speaker 1: at that they really do debate. They put their views
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  Speaker 1: on the table and then they have to come to
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  Speaker 1: some kind of consensus. That's what's going to be the
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  Speaker 1: question in June. Yeah, that's exactly right. So again it'll
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  Speaker 1: be interesting to hear what Fisher and Dudley say tomorrow. Um,
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  Speaker 1: and of course we still have a few more major
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  Speaker 1: data releases. Remind our listeners why Stan Fisher and Bill
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  Speaker 1: Dudley are so important. So these are the two outside
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  Speaker 1: of Janet Yell in the FED chair who you really
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  Speaker 1: need to listen to, because Stan Fisher is, of course
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  Speaker 1: the vice chair. Bill Dudley is the New York Fed president.
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  Speaker 1: He has he is the only regional bank president with
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  Speaker 1: a permanent vote on the FMC. He gets to vote
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  Speaker 1: every every year. Everyone else has to rotate. So those
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  Speaker 1: are the really the key the three people, and and
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  Speaker 1: they haven't spoken a lot lately, frankly about their views.
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  Speaker 1: These other people who have been talking a lot about uh,
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  Speaker 1: you know, potential rate hikes in June are more um
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  Speaker 1: the regional fed presidents who are seen as slightly less
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  Speaker 1: influential than that key inner circle. Dave Wilson, I'm just
• 5:11
  Speaker 1: looking back at the S and P five reminding myself.
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  Speaker 1: You know, we've had a couple of instances where there
• 5:17
  Speaker 1: was real concern about rates going up. You look back
• 5:20
  Speaker 1: to August and you see stocks fell out of bed,
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  Speaker 1: bounced back. You see January, same thing happen again, stocks
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  Speaker 1: bounced back. So I suppose the question now as we
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  Speaker 1: go into June, is are we headed for a third
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  Speaker 1: time with that scenario playing out? Because we really have
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  Speaker 1: seen you know, you look at the SMP five re
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  Speaker 1: established itself in the range that you saw before the
• 5:43
  Speaker 1: first and the second moves down, and you know, we
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  Speaker 1: get to the end of the week, it will be
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  Speaker 1: a year since we've seen a new high for the index.
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  Speaker 1: So you know, it kind of raises the question of
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  Speaker 1: whether the bullmarket is even still in existence. But nonetheless,
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  Speaker 1: I mean it is something to consider. Quick question, you
• 6:01
  Speaker 1: get about ten seconds, Matt Bows. Do you think there's
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  Speaker 1: a greater risk of dissents at the next meeting. Oh yeah,
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  Speaker 1: definitely on both sides, for the hiker against. That's right.
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  Speaker 1: We'll see what happens. Okay. I want to thank you
• 6:13
  Speaker 1: both very much. Matt Bosler, Bloomberg News of Federal Reserve reporter,
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  Speaker 1: and of course Dave Wilson Bloomberg Stocks comments to be
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  Speaker 1: joining us in the next hour of taking Stock right
• 6:24
  Speaker 1: here on Bloomberg Radio.