What Fed Minutes Said (video)

Below, Steve Liesman gives us the long and the short of the Fed minutes. Here's my take:

In general, I think the Fed has a good handle on the economic landscape going into the new year. Breaking it down:

1. I do think there's a decent chance that we hit their 2% inflation target later in the year.


2. They mention that it's hard to fight deflation and that if they make a mistake it'll be to stay lower (with regard to their benchmark rates) for longer. That "mistake" means they believe they could run the risk of falling behind the inflation curve.


3. I agree (as I stated on TV here) that the overseas picture improved enough leading into the meeting to give them the green light.


4. I believe that they are justified in their concerns over the negative impact of a strong dollar. However, I don't think it'll pose nearly the headwind it has the past couple of years.


5. Looking at the glut in many commodities, their concerns regarding "commodity weakness" is certainly understandable. Of course, ultimately, the cure for lower commodity prices is lower commodity prices (i.e., spurs demand).


6. I too expect to see improvement this year in overseas economies. I'm seeing it already, particularly in much of the recently-released European data.


7. Given this week's events, their concerns over China, etc., are understandable. Although, I still don't see some big implosion in 2016.


8. I absolutely agree that there's a real silver lining in low energy prices.


9. I also agree that the wage picture is positive going forward.


10. The staff's concerns over high yield spreads, earnings and credit quality are definitely something to keep an eye on, despite the fact that much of those pressures are centered in the energy and commodities space.