Street to scour Fed minutes for rate clues

At its last meeting that broke up on March 16, the Federal Reserve sent a surprisingly friendly message to financial markets when it slashed the number of planned interest rate hikes this year from four to two. In explaining the move to scale back rate increases, Fed Chair Janet Yellen cited international headwinds as reasons for caution, as well as still-low inflation.

Yellen followed those comments up with a speech in New York on March 29 when she reiterated the Fed’s expectation for a slower pace of hikes, when she said the nation’s central bank will “proceed cautiously.”

Well, the minutes of that key Fed meeting are scheduled to be released Wednesday at 2 p.m. ET, and Wall Street pros will be trying to garner additional information as to what prompted the Fed’s decision. Investors will also try to glean what exactly it would take for the Fed to ramp up rate hikes in the future.

The Fed’s decision to reduce its “dot plot” for rate hikes to just two this year was greeted positively by investors and was instrumental in sparking a second wave of a rally that sent U.S. stocks back into positive territory for the year and to its best levels of 2016.

Despite the Fed’s “dovish” messaging, Wall Street is still unsure of what the unpredictable Fed might do with rates going forward. And with many Fed officials on the speaking circuit and discussing rates, the Fed outlook seems to be constantly evolving along with the economic data.