The Fed's Debate on Credit Tightening

The minutes of the March FOMC showed that some members would have otherwise favored a 50 basis point hike. The risk of a broader financial crisis was clearly sufficient to keep a return to a half point move off the table. We continue to see the 50 or 75 basis points of easing priced in by year end not as a 100% confidence but rather a probability somewhere between 40 and 50%.