The minutes from the Fed's June meeting released last night confirmed a guess from this earlier tweet: The FOMC members' dot plot predictions were still based on trends and data before the memorandum between the U.S. and Iran was signed. They didn’t fully account for the trajectory after the memorandum, which actually creates an expectation gap. It’s understandable though—since the memorandum was just signed and the subsequent trends are still unclear, the safest approach is to rely on previous data for predictions, with room for adjustments in the future. We also talked about how fast the downward slope of core inflation would be. Looks like Nick has finally caught on to this point. After the mid-June FOMC meeting, he was pretty pessimistic.