Fed hawks and doves: what they are saying on monetary policy

      Comments Off on Fed hawks and doves: what they are saying on monetary policy
Fed hawks and doves: what they are saying on monetary policy

(Reuters) -The labels “dove” and “hawk” have long been used by central bank watchers to describe the monetary policy leanings of policymakers, with a dove more focused on risks to the labor market and a hawk more focused on the threat of inflation.

The topsy-turvy economic environment of the COVID-src9 pandemic sidelined those differences, turning Federal Reserve officials at first universally dovish as they sought to provide massive accommodation for a cratering U.S. economy, and then, when inflation surged, into hawks who uniformly backed aggressive interest rate hikes.

The risks are now seen as more balanced and the choices more nuanced.

The following chart shows officials’ latest views on the outlook for Fed policy and the economy. The designations are based on comments and published remarks; for more on the thinking that shaped these hawk-dove designations, click on the photos in this graphic.

For a breakdown of how Reuters’ counts in each category have changed, please scroll to the bottom of this story.

Dove Dovish Centrist Hawkish Hawk

  Patrick Jerome Powell, Raphael Bostic, Michelle

Harker, Fed Chair, Atlanta Fed Bowman,

Philadelphia permanent President, 2024 Governor,

Fed President, voter: “I don’t voter: Now permanent

2026 voter: think that it is expects one voter: “I

When it comes likely based on rate cut this remain

to a rate cut, the data we have year, in the willing to

“I think we’re that the next fourth quarter, raise the

close, give us move that we down from two federal

a couple of make will be a previously funds rate

meetings.” Feb rate hike … It (April 3, at a

22, 2024 is more likely 2024). “If future

… we hold the September is meeting

policy rate the right time, should the

where it is …” then it’s going incoming

May src4, 2024 to be data

September. If indicate

it’s December, that

that’s the progress

right time, on

that’s going to inflation

be December. If has

it’s February stalled or

that’s the reversed.”

right time, May src7,

it’ll be 2024

February.” May

30, 2024

  John Williams, Loretta Mester,  

New York Fed Cleveland Fed

President, President, 2024

permanent voter: voter*: “I

Three rate cuts would not think

in 2024 is “a that that’s

reasonable kind still

of starting appropriate,”

point.” (Feb 28, in reference to

2024) “I don’t her previous

feel any expectation for

urgency” to three rate cuts

lower rates.” in 2024 (May

May 30, 2024 20, 2024). “I

need to see a

few more months

of inflation

data that looks

like it is

coming down.”

May 2src, 2024

    Philip Thomas Barkin,  

Jefferson, Vice Richmond Fed

Chair: “It is President, 2024

too early to voter: Lower

tell whether the consumer

recent slowdown inflation in

in the April was

disinflationary “good, but

process will be still not where

long-lasting.” we are trying

May 20, 2024 to get.” May

src6, 2024

    Michael Barr, Jeffrey Schmid,  

Vice Chair of Kansas City Fed

Supervision, President, 2025

permanent voter: voter: “I am

“We will need to prepared to be

allow our patient.” May

restrictive src4, 2024

policy some

further time to

continue its

work.” May 20,

2024

    Christopher Neel Kashkari,  

Waller, Minneapolis Fed

Governor, President, 2026

permanent voter: voter: Penciled

“In the absence in two 2024

of a significant rate cuts in

weakening in the March. “Many

labor market, I more months of

need to see positive

several more inflation data,

months of good I think, to

inflation data give me

before I would confidence that

be comfortable it’s

supporting an appropriate to

easing in the dial back.” May

stance of 28, 2024

monetary

policy.” May 2src,

2024.

    Lisa Cook, Lorie Logan,  

Governor, Dallas Fed

permanent voter: President, 2026

“Fully restoring voter: “I think

price stability it’s too soon

may take a to really be

cautious thinking about

approach to rate cuts.” May

easing monetary 30, 2024

policy over

time.” March 25,

2024

Adriana Kugler,

Governor,

permanent voter:

“If disinflation

and labor market

conditions

proceed as I am

currently

expecting, then

some lowering of

the policy rate

this year would

be appropriate.”

April 3, 2024

    Mary Daly, San    

Francisco Fed

President, 2024

voter: Three

rate cuts this

year is “a very

reasonable

baseline.”

(April 2, 2024)

“I’m in a

wait-and-see

mode.” May 9,

2024.

    Austan Goolsbee,    

Chicago Fed

President, 2025

voter: At the

median Fed

expectation for

three rate cuts

in 2024 (March

25, 2024). “What

everybody is

trying to wrap

their head

around now …

is are we back

to the

traditional

tradeoff between

employment and

inflation?” May

30, 2024

    Susan Collins,    

Boston Fed

President, 2025

voter: Expects

“in the range of

two” rate cuts

for 2024 (April

srcsrc, 2024) “We’re

in a period when

patience really

matters.” May

2src, 2024

*Mester hits the Fed banks’ mandatory retirement age in June; if a new Cleveland Fed president is not in place by the Fed’s July 30-3src meeting, Chicago Fed President Goolsbee would vote until one is. 

Notes: Fed policymakers began raising interest rates in March 2022 to bring down high inflation. Their most recent policy rate hike, to a range of 5.25%-5.50%, occurred in July 2023. Half of the policymakers as of mid-March thought three rate cuts this year would be appropriate; just as many thought it would be fewer, projections released after their March src9-20 meeting showed. Two of src9 thought there would be none. Alberto Musalem, who started as the St. Louis Fed’s president on April 2, has not made any substantive policy remarks and is not included in the dove-hawk matrix.

All src2 regional Fed presidents debate monetary policy at Federal Open Market Committee (FOMC) meetings that are held eight times a year, but only five cast votes at any given meeting, including the New York Fed president and four others who vote for one year at a time on a rotating schedule.

The seven Fed governors, including the Fed chair and vice chairs, have permanent votes on the FOMC.

Reuters over time has shifted policymaker designations based on fresh comments and developing circumstances. Below is a Reuters count of policymakers in each category, heading into recent Fed meetings.

FOMC Date Dove Dovish Centrist Hawkish Hawk

June ’24 0 src src0 6 src

Apr/May ’24 0 src src0 6 src

March ’24 0 src srcsrc 5 src

Jan ’24 0 2 9 4 src

Dec ’23 0 2 9 4 src

Oct/Nov ’23 0 2 7 5 2

Sept ’23 0 4 3 6 3

June ’23 0 3 3 8 3

March ’23 0 2 3 src0 2

Dec ’22 0 4 src src2 2

Read More