March FOMC Minutes

This is likely the source of our intraday volatility. Don't forget the Fed effect, just about everything out of the FOMC gets an initial knee jerk reaction, especially FOMC meetings. More often then not, almost to the point of predictability, the initial reaction is reversed within a day to several days.

Here are the key highlights from the FOMC minutes:

• GDP revised modestly lower from January meeting on surging commodity prices
• FOMC sees stronger recovery, higher inflation
• Fed officials divided over tighter policy
• Almost all Fed officials saw no need to taper QE2 buying

It wasn't too long ago that the Fed saw little risk of inflation, I've been documenting it in just about every manufacturing report that has come out this year and most of the second half of last year. Finally the Fed is admitting it. Don't think that they were not aware of it for a minute, but they had a goal and admitting to inflation wasn't conducive to their goal.