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Today, the Federal Reserve released its minutes from its December 15 meeting of its interest-rate setting body the Federal Open Market Committee. Investors and traders didn’t like what they thought they heard–a growing consensus on a first interest rate increase at the March meeting. The CME Fed Watch tool, which calculates the odds of an interest rate move by the Federal Reserve from prices in the fed funds futures market, today showed the odds of a rate increase at the March 16 meeting as almost 63% and the odds of the bank standing pat at just 32%. Yesterday the odds of the Fed keeping rates steady at the March meeting were a tad better than 40%. A month ago, on December 3, the odds of rates staying at current levels were almost 73%.

To me the strongest argument that the Fed is done worrying about supporting growth and jobs and is switching full time to inflation fighting came in comments in the minutes that indicate some Fed members thought the current rate of unemployment of just above 4% was consistent with full employment. (Fed officials, I’d note, all have jobs.)

The yield on the 10-year Treasury rose today to 1.69%, an increase of 4 basis points. At noon, before the release of the minutes, the yield was 1.67%.

The Standard & Poor’s 500 closed today down 1.94% and the Dow Jones Industrial Average lost 1.07%. Technology stocks took the biggest hit with the NASDAQ Composite off 3.34% and the NASDAQ 100 losing 3.12%. The iShares Semiconductor ETF (SOXX) fell 3.40% as even recent favorites such as Marvell Technology (MRVL) got hit hard (with a drop of 4.81%.)

The Russell 2000 small cap index declined 3.12%.

The damage was by no means limited to technology stocks. Retailer Macy’s (M)dropped 5.87%.

The CBOE Standard & Poor’s 500 Volatility Index (VIX) soared 16.68% to 19.73 today. The VIX “fear index” had been up just 0.12% to 16.68 as of noon New York time.

But that was before the Fed minutes took the financial markets in another direction.