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Fed minutes: no news is good news?

Happy Friday, friends! Wednesday brought us minutes from the November FOMC meeting, and the market reacted rather positively to it. This was somewhat surprising given that the minutes themselves had very little, if any, new and positive information within.

Reducing the size of hikes

The financial media initially focused intently on the Fed's discussion about reducing the size of rate hikes. A change that Chair Powell alluded to during his press conference, that numerous Fed speakers have discussed prior, and which Fed Funds Futures have been pricing in for many months.

The next Fed rate decision on December 14th is currently expected to be 50 bps with 75.8% probability, a level of certainty that did not change whatsoever after Fed minutes were released, meaning the market already expected this outcome.

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