FOMC remains committed to dovish policy – Capital Economics

"Although the Summary of Economic Projections (SEP) released after the mid-March FOMC meeting showed some disagreement among Fed officials on how long to leave the fed funds rate at near zero, the minutes offered few hints of any serious tensions," notes Paul Ashworth, Chief US Economist at Capital Economics.

Key quotes

"The minutes were, on the whole, as dovish as expected, noting that labour market conditions for "those in the most disadvantaged communities were viewed as lagging" and, as a result, "the economy was far from achieving the FOMC's broad-based and inclusive goal of maximum employment"."

"Officials were unworried by the sharp rise in Treasury yields, rationalising that "as reflecting the improved economic outlook, some firming in inflation expectations, and expectations for increased Treasury debt issuance". The minutes do warn that "disorderly conditions" in the Treasury market could derail the recovery, but leave it at that without quantifying what that means."

"All things considered, there is little here to change our view that the Fed will wait until late 2023 before beginning to raise interest rates."