Market Reaction to FOMC Minutes Muted, Eyes on Europe

May 16, 2012 3:50 PM EDT
Stocks will finish Wednesday's session mostly unchanged following the release of the FOMC minutes from the April 24-25th Fed meeting. The Dow last traded at 12,618, down about 13 points for the session, while the S&P 500 and Nasdaq are down 3.5 and 18 points, respectively.

Several members of the Committee pointed at further easing if the recovery in the US wanes, and this seems to be in-line with what the market was expecting.

The minutes make it clear most members were comfortable with the levels of inflation seen in the U.S., although some expressed concern a moderate recovery could cause inflation to rise.

Fed officials acknowledged financial strains within the euro area which have increased, resulting in increasing on yield spreads on Italian and Spanish debt compared to German debt.

The FOMC also reiterated the view further stimulus in the U.S. will be dependent on future data. The assumption is the Fed is eying data out of Europe as well as data in U.S.

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