The “solids, modestly and little changed” have it. Yesterday’s FOMC minutes as ever run to a dozen pages and steer the market into its thinking. The small bounce of around 25c in 10-year US Treasury prices show the text was received in a “somewhat” dovish tone. Central bank speak is always measured but May’s minutes were more measured than March’s.

Despite this, the trajectory of higher US rates was reiterated, as the FOMC “expects economic conditions to evolve in a manner that will warrant further increases”. More tellingly is that the stock of $4.5trillion odd government and mortgage-backed bonds aren’t for sale any time soon and the key reinvestment of coupon payments are set to be ongoing. What is new is the management of the amount of reinvestment of maturing bonds that will take place.

Enter into the market lexicon reinvestment “caps”. The idea here is that the nominal amount of maturing bonds increases over time and a higher cap means a smaller reinvestment into the market. Set to be discussed at the next meeting, the “caps” could well be introduced by Q4 this year. The FOMC is at pains to add that this should happen in a “gradual and predictable” manner. The market will squabble over the rate and scale of the quarterly increase of the caps, also the balance between Treasuries and ABS along with the tenor of what remains to be reinvested.

So there you have it. Business as usual. Rates are set to trickle higher at some stage – although expectations remain “modest” – and only when the economic conditions demand it; and expect only a slow and gradual unwind of QE.

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