Fed's July Minutes Are 'Already Stale,' Economists Say, Which Is a Lot for a Document Nobody Read

WASHINGTON, D.C. — The Federal Reserve is set to release the minutes from its July meeting this week, and the reaction from the financial press has been the reaction of a man handed a newspaper from three weeks ago, which is to say: why are you showing me this?

The minutes, which will detail a meeting at which the Federal Open Market Committee split on whether to raise interest rates, arrive, as the Fed’s minutes do, roughly three weeks after the meeting they describe. By the time they land, they will be describing a world that no longer exists. The July statement flagged “elevated uncertainty that owes, in part, to the conflict in the Middle East” and noted that “productivity growth and capital investment are strong,” which is the Fed’s way of saying the economy is doing something, and the something is fine.

After the July gathering, the odds of a September rate hike skyrocketed, because inflation remains elevated and oil has stopped reading the news. A weak July jobs report and soft inflation data have since pulled those odds back down, and the economists at BofA Securities have looked at the pending minutes and called them, in the word they chose, “stale.”

Let that sit for a moment. The Federal Reserve — the institution whose rate decisions determine whether your mortgage, your car payment, your small business, and the entire concept of a future remain affordable — is about to publish a document its own analysts have declared stale before publication. That is a restaurant releasing a menu that says “all prices may have changed since you sat down.”

Chair Kevin Warsh, for his part, gave no specific details in his post-meeting press conference about how the central bank plans to bring down inflation, which is not surprising, because the minutes are now a document that will be stale on arrival, and the press conference is a document that is stale in real time. The Fed has entered an era in which its official record is always one step behind the economy, the way a dashboard is one step behind the engine, except the dashboard is a 4,000-page document and the engine is a war in the Middle East.

There is a school of thought — a small one, a frightened one — that the release itself is the point. The Fed meets, disagrees, goes home, and then, three weeks later, tells you in 40 pages that it disagreed, by which time it has met again, disagreed again, and begun drafting the next 40 pages. The American economy is, in this telling, not a system. It is a feedback loop with a dress code.

At press time, the minutes had not yet been released, and the markets were, according to one trader, “waiting for them the way a jury waits for a verdict it already knows,” which is the financial press’s word for “I don’t know,” and which, in a week like this one, is the most honest position in the building.