“The Fed remains resolutely hawkish (biased toward higher interest rates). There was no hidden, secret dovish message in the July 26-27 minutes. But some people found one anyway.”
USAGOLD note: Isn’t it time we instituted definitions for the terms dovish and hawkish more suitable for the times? Is it hawkish or dovish to raise rates, but keep them a considerable distance from the inflation rate? In our view, it is simplistic to call the Fed hawkish simply because it raises rates. The central banks of Argentina, Venezuela, and Zimbabwe have been raising rates for years, yet their inflation rates are now 70%, 167%, and 257% respectively, and climbing. No one would be so foolish as to define their central banks as dovish. Wall Street reacts to the act of raising rates as if it were a market edict delivered from atop Mr. Sinai when the real net effect on inflation might be to contain rather than eliminate it.