TD Securities’ Global Strategy Team expects the April FOMC minutes to clarify how many participants backed removing the easing bias and how divided the committee was after several hawkish dissents. They argue that strong CPI and payrolls since April have shifted momentum toward hawks and support their call for a formal bias change at the June meeting.

FOMC minutes to detail bias debate

"The April FOMC minutes will shed more light on the discussion around changes to the statement's easing bias."

"Based off recent Fedspeak, we believe "many" participants supported dropping the bias — for which three voting members dissented."

"Although the strong CPI and payrolls reports since the April meeting make the minutes somewhat stale, we believe momentum is moving with the hawks."

"There was already significant support for dropping the bias in April, and recent data releases only support that further — motivating our call for them ultimately making the change in June."

"On Wednesday, the focus will be on the 20y bond auction in the afternoon as the market tests investors' appetite for duration."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)