The May 3–4 Minutes of the Federal Open Market Committee earned a welcome relief rally from stock and bond investors, which includes nearly everyone with an IRA or 401(k) retirement account. Why? In my judgement it was because FOMC participants sounded more pragmatic and humbler about predicting and managing the unknowable future. Specifically, the FOMC no longer seemed so rigidly committed to a fixed schedule of routine half‐​point or larger increases in the federal funds rate from June through December. In place of the mid‐​March introduction of annual central planning, the Minutes now say such increases "would likely [but not certainly] be appropriate at the next couple of meetings." Beyond that, it depends.

"Many participants assessed that the Committee's previous communications had been helpful… and had contributed to the tightening of financial conditions" (a euphemism for a terrifying two‐​month slide in stocks and record crash in bond prices). But "several participants noted the potential for unanticipated effects on financial market conditions. Participants agreed that the economic outlook was highly uncertain and that policy decisions should be data dependent… [and that] risk‐​management conditions would be important in deliberations over time regarding the appropriate policy stance."

Many FOMC members also assessed that font‐​loading "tightening of financial conditions" through previous communications now gave them more flexibility to change plans or policies in response to a highly uncertain global outlook, and unanticipated risks or financial effects. They will, as the Minutes put it, be "well positioned later this year to assess the effects of policy firming and the extent to which economic developments warranted policy adjustments" (presumably in either a firmer or gentler direction).

Former Fed Vice Chairman Alan Blinder recently wrote that the Fed "knows it must raise interest rates substantially [and] use forward guidance to make clear that much higher rates are coming. But because landing softly is their goal, they are unlikely to slam the economy into the ground." He predicted a "mild" recession, or what Fed Chairman Powell recently retitled a "softish" landing. The trouble is that such open‐​ended "forward guidance" about "much higher interest are coming" sounded to many like setting an airplane on automatic pilot – pointed on a downward trajectory toward a crash landing while pilots stop looking out the window and take their hands off the wheel. We have taken that white‐​knuckle trip before.

The new Minutes, by contrast, assure us that the pilots woke up and are back in the cockpit. "Members agreed that, in assessing the appropriate stance of monetary policy, they would continue to monitor the implications of incoming information for the economic outlook and that they would be prepared to adjust the stance of monetary policy as appropriate in the event of risks that emerged…"