Much has been made of today's FOMC Minutes as some sort of defining moment in the potential long-term shift toward higher rates.  Some say it's a red herring, and instead point to Yellen's speech on Friday.  While both of these events are potentially informative, they're not the moments that will define a generational shift from bull to bear market in bonds.  That said, it's understandably and extremely tempting to view them as such.

The thing that makes it so tempting is the fact that today's Minutes are from the April meeting and the April meeting was the last one that had zero potential to result in a rate hike.  (By the way, that's 'zero' according to the Fed itself--not me.)  That also means that April's Minutes might be the first place where markets might see more serious clues about an impending rate hike. 

I highly doubt that the Fed would leave something anything explicit in the Minutes.  It's not like they'll say "most agreed that June would be the best time to consider a rate liftoff," but they could say something that's sort of in that same vein, and I do agree that markets would have a field day with it.  Bottom line on the Minutes: it's all about clues like that, which may or may not exist.

The thing about Yellen on Friday makes less sense to me, though to some smart people, it makes more sense.  Yes, it could certainly be a market mover, but any major impact would be reserved for next week, because she's not speaking until 1pm on Friday.  Most of the business of the trading world is done by then, not to mention the fact that there's an early close and a 3-day weekend.

So is it about the Fed, Yellen, or something else?  The answer is, was, and will be "something else."  Here's why:

In the upper portion of the chart, it's easy to see why one might conclude "it's all about the Fed."  But then the lower portion of the chart leaves no doubt that the major bond market shock in April/May has come from Europe.  It's not always easy to remember that when US and European yields may lose track of each other over shorter time intervals.  But that decoupling is not only common, it's also to be expected on a week with FOMC data and tons of corporate debt issuance. 

Please understand, I'm definitely not saying today's FOMC Minutes can't move markets.  Indeed they can, especially if there's some sort of epic clue as outlined above.  But neither would it be surprising to see very little reaction (or trading activity happening for other reasons).