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15:04 FOMC Minutes (may be what's causing a late selloff)

https://www.briefing.com/GeneralContent/InPlayEQ/Active/ArticlePopup/ArticlePopup.aspx?SiteName=InPlayEqPopup&ArticleId=NS20090520150422TakingStock

The minutes from the April 29 FOMC meeting contained a lot of information the market already knew. One prevailing theme was the thinking that there were tentative signs in the economic data that suggested the pace of economic decline has slowed. That view notwithstanding, the minutes also showed that the Fed downgraded its real GDP projections for 2009, 2010 and 2011.

In reading through the minutes, it became clear that committee members have a much more guarded view of recovery prospects than the market seems to have these days.

The conservative views, we suspect, are somewhat ingrained for policymakers who appreciate the vagaries of economic forecasting and the seriousness of the global economic slowdown that followed the financial crisis.

In other words, Fed officials would rather err on the side of conservatism at this point when it comes to economic forecasts given that the pool of data pointing to stabilization still isn't that deep in the grand scheme of things.

There was some discussion among members that a further increase in the amount of purchases of agency and Treasury securities may be needed at some point to spur a faster recovery, but all members felt it was appropriate to wait further to see how policy actions implemented to date influence the economy and financial conditions before adjusting the size and timing of such purchases.

The stock market has digested the minutes with the same sense of aplomb that it has digested most data of late, choosing to stay focused on the fact that things are less bad than before and pushing the consideration that things could deteriorate again to the far reaches of its mind.

We'd be careful not to put too much stock (no pun intended) in the market's initial reaction given that the ranks of traders driving the market have already started to thin ahead of the Memorial Day holiday weekend.

In general, we'd characterize the minutes from the April 29 FOMC meeting as being more cautious-sounding than anything else but, for the most part, not all that surprising for market participants.

Below is a table of the Fed's updated central tendency projections for real GDP, the unemployment rate, PCE inflation and core PCE inflation for the 2009-2011 period.
Fed Economic Projections (central tendencies as of May 2009)
2009 2010 2011
Change in real GDP -2.0 to -1.3 2.0 to 3.0 3.5 to 4.8
January projection -1.3 to -0.5 2.5 to 3.3 3.8 to 5.0
Unemployment rate 9.2 to 9.6 9.0 to 9.5 7.7 to 8.5
January projection 8.5 to 8.8 8.0 to 8.3 6.7 to 7.5
PCE inflation 0.6 to 0.9 1.0 to 1.6 1.0 to 1.9
January projection 0.3 to 1.0 1.0 to 1.5 0.9 to 1.7
Core PCE inflation 1.0 to 1.5 0.7 to 1.3 0.8 to 1.6
January projection 0.9 to 1.1 0.8 to 1.5 0.7 to 1.5

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