Three things we learned from the FOMC Minutes

What did we learn about the path of rates?

1) The Fed will have a serious debate about hike rates in December

Most everyone believed that December was on the table for a hike, now we know it for sure. The minutes say that members deliberately wanted to convey that a December liftoff may be appropriate.

The initial hint was in the Oct 28 statement when they said, "In determining whether it will be appropriate to raise the target range at its next meeting."

This is something that's been flagged by FOMC speakers since the meeting.

2) There is no change in the view of the bond market

The Fed Funds market was pricing in about a 70% chance of a hike before the Minutes and that's unchanged afterwards. So why is the dollar a bit lower? The risk was that the Fed would send a stronger signal about hikes and traders were making US dollar bets to frontrun it. When no hint materialized, they get out and that's weakened the US dollar.

In one year, the derivatives market prices in rates at 0.74%.

3) The criteria is the same, but it's mostly been met

The Fed highlighted three criteria that must be met to hike in December. 1) Full employment -- the Oct NFP report should have taken care of this one. 2) No economic/financial system shocks -- Markets have been settled or sanguine since the meeting. 3) Confidence in rising inflation -- Not much has changed here but a handful of officials have flagged that commodity inflation is mostly in the rearview mirror. But with crude breaking $40 today, the inflation debate is the main risk to a hike.