US: FOMC Minutes and CBO scoring of the health care reform bill in focus - BBH

Analysts at BBH suggest that the CBO scoring of the health care reform bill that passed the House of Representative is important as it is the official arbiter of such issues.

Key Quotes

“If the deficit is not reduced by two billion dollars over the next decade, it is possible that the bill is modified again and a new vote is needed.  This is problematic because the bill passed narrowly (217-213) before and it was a delicate and fragile balance.  A new provision that had been added allows states to waive some regulations that could lead to more people becoming eligible for tax credits, which has deficit implications.  Recall that the savings from health care were going to be used to fund tax reform.”

“Although many will look at the FOMC minutes, it is difficult to imagine the minutes will be much more revealing that the meeting itself, which was as much of a non-event as an FOMC meeting can be.  The FOMC statement looked through the recent softness of the US economy and said nothing to dissuade ideas that the Fed is poised to hike rates in June.  Given that the minutes pick up sentiment from non-voters as much as voters, the risk seems asymmetrical for more hawkish rather than dovish minutes.  It still seems early to expect many revelations about the balance sheet strategy.”