The release of the FOMC minutes from last month's meeting boosted stocks Tuesday afternoon, as the minutes showed there was no opposition to the Fed's aggressive 50 basis point cut, and that its members seemed very comfortable with inflation. The officials did not hint at the timing or direction of the next Fed move, saying "future actions would depend on how economic prospects were affected by evolving market developments and by other factors." The Fed forecasted "moderate" income growth in the third quarter, and cut its fourth-quarter and 2008 GDP estimates. It also expected a "modest" increase in employment would dampen consumer spending. As for inflation, members "recognized that incoming data on core inflation continued to be favorable, and they generally were a little more confident that the decline in inflation earlier this year would be sustained." The minutes also noted "all members agreed that a rate cut of 50 basis points [on Sept. 18] was the most prudent course of action." There was some belief based on comments prior to the meeting that some of the FOMC's more hawkish members did not support the cut. Finally, though many believed the August jobs report, which was off by 93,000 jobs, greatly influenced the Fed's decision, it did not seem to be fooled by the numbers, saying August employment "probably was not as weak as the most recent monthly data had suggested." All markets were up after the minutes were released.
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.