A relatively dovish tone in the Federal Reserve Open Market Committee's (FOMC) May meeting minutes released this morning AEST helped lift benchmark US equity indices - Dow up +75-points or +0.36%, while the broader S&P500 advanced +0.25% to settle at a fresh record closing high, NASDAQ +0.40%. The US central bank indicated a gradualist approach to scling back their US$4.5 trillion balance sheet, while noting further evidence in the economic data was required in order to confirm the first-quarter slowdown was "transitory" (a word they used 10 times in the minutes). In sum, the Fed indicated a June interest rate hike was appropriate but that further hikes were data-dependent - "Members generally judged that it would be prudent to await additional evidence indicating that the recent slowing in the pace of economic activity had been transitory before taking another step in removing accommodation" and with further moves in interest rates to be judged against the objectives of "maximum employment and 2 percent inflation".
