Listen to the Fed's speakers: Hawks or doves?

Have you ever noticed the pattern of hawks or doves?

Hawk is an aggressive, fast-moving bird, while dove is defensive, gentle, and strategic.

Does this have anything to do with investing?

Yes. You are not watching “Animal World”, and we'll soon get to the point.

You may hear it in some news, describing the FOMC as hawkish or dovish.

The FOMC is called so for a reason.

Hawks and doves have a special meaning here.

They are used to describe monetary policy direction.

The Fed's monetary policy is aimed at two objectives:

Stable prices, and maximum employment.

The two objectives are naturally against one another.

Hawkish officials are more focused on fighting inflation.

As a result, they seek to tighten monetary policy and lean towards higher interest rates.

For hawks, quantitative easing is not acceptable.

On the contrary, dovish officials favor maximum employment.

They advocate lower interest rates to promote economic growth.

For doves, they are likely to say no to quantitative tightening.

Apart from hawks and doves, there are also centrists who hold a neutral position.

Will they ever change their position?

Of course.

Let's take Greenspan as an example.

As the former chairman of the Fed, he was considered to be fairly hawkish in the 1980s during the Great Inflation.

But he shifted to a dove over time as he supported not raising rates in the late 1990s.

Sometimes, people tend to take for granted that a hawk is supposed to raise interest rates.

However, it is worth noting that a hawk may change his mind.

Therefore, when Fed officials speak publicly, don't rely on every statement they make.

Are you wondering who is a dove and who is a hawk?

Very few FOMC members directly describe themselves as hawkish or dovish, but some financial institutions release graphs every year showing the position of every member.

Alternatively, you can always find the related information on moomoo.