April 13, 2015 —The minutes of the U.S. Federal Reserve’s March meeting were released on Wednesdayafternoon but they did not provide many new clues regarding the timing of the Fed’s first rate hike. The debate detailed in the minutes focused on developing a rough blueprint for recognizing the onset of inflationary pressures that would indicate rate hikes were warranted. As part of the focus on inflation, there was also a good deal of discussion on the need for a more stable dollar. Fed Chair Janet Yellen emphasized that policymakers do not need to see wage growth or general inflation accelerate before beginning to hike rates, but also made it clear she would be uncomfortable raising rates if inflation were to fall further from already low levels. The Fed minutes, which occurred before March’s weak jobs report and the latest weak manufacturing readings, suggest the Fed remains far from consensus on when the first rate hike should occur – the June meeting, September, or perhaps not even until 2016.
Aside from the Fed minutes it was a somewhat light week for data. Thursday’s weekly initial jobless claims data again came in better than expectations, with the four-week moving average reaching its lowest level since June 3, 2000. The recent strength in claims is leading to some optimism that the labor market is regaining its momentum. Earnings season also began on Wednesday and will kick into high gear in the coming week with 36 S&P 500 firms reporting first-quarter earnings, including many of the major domestic banks. The coming week will also feature a number of speeches by Fed officials, with Vice Chairman Stanley Fischer, St. Louis Fed President James Bullard, and Richmond Fed President Jeffrey Lacker giving separate addresses on Wednesday. The S&P 500 finished last week with three straight positive days to regain its 50-day moving average and begins this week within 1% of its all-time closing high.