Updated: 01-20-2017

The minutes from the December 13-14 Federal Open Market Committee (FOMC) meeting could have had a big question mark transposed over them.

Generally speaking, committee members felt pretty good about current economic conditions, yet uncertainties about the outlook remained high primarily because the FOMC (like the rest of us) still doesn't have any specific idea what the mix of the Trump Administration's tax, spending, regulatory, and "other possible policy changes" will look like.

Everyone by now has a sense that policy changes are coming, yet actual legislation is still lacking and will be lacking for several more months. Fed officials, therefore, are refraining from jumping to any quantitative conclusions at this juncture, although the minutes did note that almost all participants indicated the upside risks to their forecasts for economic growth had increased as a result of the potential for expansionary fiscal policies in coming years.

Still, in keeping with its data-dependent guideline, the tone of the minutes implied FOMC members will be content to wait and see what unfolds for the economy before altering its policy rate outlook, which currently projects three rate hikes in 2017.

Most participants, it was said, judged that a gradual pace of rate increases was likely to be appropriate to promote the FOMC's objectives of maximum employment and 2 percent inflation; however, there was an acknowledgment that some upside risks, if realized, might call for a different policy path than is currently expected.

Ultimately, there was nothing surprising in the admission, and it was tempered somewhat by an acknowledgment of potential downside risks which included, but were not limited to, additional appreciation of the dollar, financial vulnerabilities in some foreign economies, and the proximity of the fed funds rate to the effective lower bound, which limits the Fed's ability to use the policy rate as a supportive tool in the event of an adverse shock.

There wasn't any sharp response in the capital markets to the release of the minutes, which presented a number of alternating perspectives (as they always do) without upsetting the market's preconceived notions about what FOMC members had likely discussed at the December meeting.

The next FOMC meeting will take place January 31 - February 1, which is shortly after the inauguration. That meeting will mark a change in the complexion of voting FOMC members as a new pack of Fed presidents rotates into a voting position while the old bunch rotates out.

The new voting members, whose intra-meeting views will carry newfound importance, will be Chicago Fed President Charles Evans, Dallas Fed President Robert Kaplan, Minneapolis Fed President Neel Kashkari, and Philadelphia Fed President Patrick Harker.

--Patrick J. O'Hare, Briefing.com

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