It’s official: Instead of policy doves on the U.S. central bank’s Federal Open Market Committee, there are now only “non-hawks.” A research note from Thomas Lam at OSK-DMG used the term in referring to recent remarks from once more dovish officials like Charles Evans of the Chicago Fed and San Francisco Fed President John Williams.
The implied message from the latest Fed comments (or reticence), namely from the non-hawks, is that policymakers are clearly assessing a broader spectrum of considerations – beyond data-dependence – when mulling over the prospect of tapering in September.
Lam neglected to mention the silence from arguably the most dovish Fed member of all, Boston’s Eric Rosengren. He and Evans were at the forefront of calling for continuous and aggressive stimulus in the form of asset purchases. But recently, the Fed as a committee has shifted away from its emphasis on balance sheet expansion toward forward guidance – thus far with mixed success.
During a briefing with reporters in Greenville, South Carolina last week, I asked Evans about why he appeared to have given up on asset buys, despite still sub-target inflation, high unemployment and anemic growth. In part, he emphasized his own optimistic forecast that growth will bounce back to around 3 percent next year. He added:
I’ve been among the most enthusiastic advocates for as aggressive monetary policy as we can. I think we’ve put in place a lot of aggressive policies. I do take the point that this was intended to be a temporary program and it’s been going on for over a year and we’re looking at likely another many months of this – mid-2014 I think in terms of being in the vicinity of 7 percent (unemployment).