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Stock market activity was mixed and a bit topsy-turvy today, with slimmer employment prints coming out ahead of the bell and Fed minutes depicting growing concerns about the economy this afternoon. The Dow and S&P were up +0.25% and +0.16%, respectively, but the Nasdaq — which spent nearly the entire session in the red — and the small-cap Russell 2000, which was way below the other indexes today, finished -0.07% and -0.48%, respectively.

Fed Minutes Considering Potential Headwinds

At 2pm ET today, the minutes to the most recent Federal Open Market Committee (FOMC) meeting were released. Interestingly, market volatility looks to have cooled from that point on in the trading day, but the minutes themselves did articulate some of the thoughts among Fed members.

While the Fed sees longer-term trends still pointing generally toward +2% inflation, several of the members also now see risks inherent in the economy ahead. Among these are price pressures from likely policies enacted by the incoming presidential administration, which looks to upend the status quo in numerous areas: trade (tariffs) and immigration (deporting a meaningful percentage of the current workforce), to name a couple.

Elsewhere, concerns that the disinflationary process has begun to stall, perhaps due to 100 basis points (bps) having been cut over the past year already, perhaps also due to a stronger economy, especially in comparison with the rest of the world. One quote in the minutes has the Fed “at or near the point at which it would be appropriate to the slow the pace of policy easing.” Which is a nice way of saying they’re not cutting rates later this month.

Markets Closed Thursday

To honor the recently deceased 39th President of the USA, Jimmy Carter, markets will be off tomorrow. So will government-oriented economic reports, which is why we saw Weekly Jobless Claims this morning instead of Thursday before the open. We’ll still have plenty to talk about in this space then, especially considering the big Employment Situation report due Friday morning.

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