Market Sees Fed Minutes as Window into Committee's True Views

The Federal Reserve's July minutes have been released, but the market's focus is not on the three dissenting votes. Instead, it's on how many non-dissenting members might support a rate hike.

The current interest rate futures imply a 67% probability of rates remaining unchanged in September and a 33% probability of a 25-basis-point hike. However, this is a significant cooling from previous expectations.

Federal Reserve Chair Kevin Warsh has reduced the use of traditional forward guidance since taking office. He emphasized that reducing forward guidance allows financial market prices to reflect economic information more directly.