Fed Chair Janet Yellen sided with doves. This conclusion was drawn by analysts who closely studied Yellen’s speech before the Committee on Financial Services, US House of Representatives, Washington.
Analysts like to label officials as hawks and doves. Of course, we are not talking about actual birds but about one of the simplest models of the game theory that describes competitive relations. These terms should be understood metaphorically: hawk is a symbol of aggression, while dove is a symbol of peace.
In other words, experts saw changes in the previously hawkish sentiment of the Fed. Earlier Janet Yellen was more decisive, now her tone changed. Generally speaking, the bank believes that it is necessary to raise rates but now pays more attention to the details. For example, Yellen stated that the monetary policy of the Fed does not follow a predetermined course, making it clear that any forecasts, including the Fed’s itself, could be wrong. The FOMC members adjust their estimates for the change of the funds rate, depending on the changing economic outlook, as well as their assessments of risk factors.
Apparently, the period of zero interest rates is over, but the current changes will be taken into account when making decisions on the rate hike. Thus, in the constant confrontation between hawks and doves, the latter once again gain ground after a brief retreat.
