The Fed Minutes were released today.

The Board agreed, “ with unemployment rate approaching 6.50% it would soon be appropriate to change its forward guidance in order to provide information about its decisions regarding the Fed funds rate after the threshold was crossed.” Fed policy makers do believe “in absence of appreciable change in economic outlook there should be a clear presumption in favor of continuing to reduce the pace.”. What does all this mean? The Fed will continue to taper the purchase of MBS and treasuries unless a major economic shift occurs. The Fed needs to revise guidance based on unemployment rate. I don’t see this statement as a negative for bonds. I believe the change in guidance will be doveish. A Yellen led Federal Reserve still sees the economy recovery far from complete. I believe the market correction is an overreaction to the minutes release. The 10 year treasury yield is 2.739%. Pricing will be updated in loan decisions shortly.