Bank of America Merrill will be looking at 3 things at December FOMC minutes

"1- The minutes from the December 14th FOMC meeting are likely to reveal modest optimism about the improvement in the recent data but a "cloud of uncertainty" about how fiscal policy could change the trajectory. While it seems likely that there will be some form of fiscal stimulus, the details are not yet apparent which makes it difficult to gauge the risks to the forecast. We therefore think the minutes will show that there was a conversation about the possible scenarios without committing to the outcome. We also think that Fed officials likely discussed the health of the labor market with a particular emphasis on measuring slack in the labor market given the drop in the unemployment rate to 4.6%. The labor force participation rate has edged higher this year, but in a very choppy fashion making it hard to decipher the trend. Moreover, the improvement in wages has been uneven, further complicating whether we have returned to full employment.

2- Inflation will also be in focus. The statement noted that although market measures of inflation compensation have moved up considerably, they remain low. And meanwhile survey-based measures remained little changed. Seemingly the Fed is not concerned about a rise in inflation expectations that could bias inflation higher. We think there will likely be a bit of a debate over the risks to inflation.

3- We will also look out for any conversation about risk management. Interestingly, Fed Chair Yellen did not talk about the asymmetry when policy is close to the effective lower bound. When asked about allowing the "economy to run hot" she said that it was not the Fed's intention to be behind the curve with policy. This was perceived to be a hawkish signal by the markets. It will be interesting to see the discussion among Fed officials about the risks".

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