Revenge of the Fed hawks – sort of

Gabriel Debenedetti contributed to this post

Federal Reserve officials appear to be getting cold feet. Having just announced an open-ended bond buying program in September and then broadening it in December, minutes from last month’s policy meeting suggested an increasing caution about additional monetary stimulus among the Federal Open Market Committee’s core of voting members.

Several (members) thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet.

That’s considerably quicker than investors had in mind. Stock and bond markets recoiled at the prospect.

Many analysts noted key figures like Chairman Ben Bernanke and his number two and potential successor Janet Yellen have often spoken out in favor of QE and argued Fed policy is having a positive effect. Says Eric Stein at Eaton Vance in Boston:

I still think the core of the FOMC will be very aggressive on the monetary easing side unless they are fully convinced that we are in a strong sustainable recovery or there is a significant pickup in inflation.

A cleaner, meaner hawks-doves chart

Fed officials have been out giving speeches in full force lately, with no less than six policymakers taking to the podium on Thursday alone. The latest, most up-to-date incarnation of our handy interactive hawks-doves chart can help you make sense of it all. Thanks to Van Tsui and the rest of the Reuters Graphics team for their great work.