Here is the money shot from the FOMC minutes:
A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent over the medium run.
The FOMC has 10 voting members. The news is clear, those in favor or more quantitative easing are now 8 to 2 and if and only if the economy goes further into the tank.
Nevertheless, the staff continued to forecast that real GDP growth would pick up only gradually in 2012 and 2013, supported by accommodative monetary policy, easing credit conditions, and improvements in consumer and business sentiment
We're sure some will hold out hope against hope that more quantitative easing will happen. After all there are two members of the FOMC leaving the door open on more quantitative easing if the unemployment situation gets worse. That said, the next time you see some major investment group claiming QE3 is sure to arrive, check their interests and why that group is making such a claim. Alternatively just read us, we sure knew QE3 was not gonna happen.
One interesting statement from the minutes is the implication somehow there is bias in the BLS employment statistics, or front loaded monthly jobs growth:
While recent employment data had been encouraging, a number of members perceived a nonnegligible risk that improvements in employment could diminish as the year progressed, as had occurred in 2010 and 2011
No, the FOMC is not implying the BLS is lying, more they are looking at seasonal adjustments and other algorithms affected by weather as well as the dramatic cliff dive plunge of 2008-2009. The below graph illustrates what the FOMC is talking about. Below is the monthly change in nonfarm payrolls. We see stronger growth in the first part of the year and much less growth towards the end. Surprising the FOMC would mention this.
Additionally the Fed also implied something funky not to quite be believed on employment data from this statement:
The decline in the unemployment rate over the past year was larger than what seemed consistent with the modest reported rate of real GDP growth.
We'll see this week when the March unemployment figures are released and be sure to look at adjustments.
Oh yeah, yes, the Fed said zero effective interest rates all the way 'til 2014. Your savings account is simply a parking lot and will remain so for some time.