AUG FED MINUTES

Aug 8 Fed minutes (policy unch at 5.25%, Lacker dissented): a somewhat bearish read, as members said unch was a "close call." All participants expressed concern about inflation risks but "members generally saw limited risk in deferring further policy tightening that might prove necessary, as long as inflation expectations remained contained." Staff forecast was marked lower but is still looking for the economy to slow. Along with econ slowing, most FOMC participants look for inflation to slow, but "the upside risks to inflation were significant." Members said so far econ "slowing seemed to be orderly," though housing had "a relatively sharp fall" in some areas. FOMC discussed communications, came to no conclusion. Lacker dissented because he said the inflation outlook had deteriorated and real growth was unlikely to moderate "by enough" to bring core inflation down.