Inflation Hawk(by Mack Wilowski) - 趙永祥的數位歷程檔

An inflation hawk, also known in monetary jargon as a hawk, is a policymaker or advisor who is predominantly concerned with the potential impact of interest rates, and favors higher interest rates to keep inflation in check.

Hawks are seen as willing to allow interest rates to rise in order to keep inflation under control, even if it means sacrificing economic growth, consumer spending, and employment.

A hawk can be contrasted with a dove. Depending on the state of the U.S. economy, policymakers may shift between a hawkish or dovish stance.

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Why is 'Inflation Hawk' the Term of the Day?

Federal Reserve Bank of St. Louis

Starting today, policymakers at the U.S. Federal Reserve will gather for the two-day November policy meeting of the Federal Open Market Committee (FOMC), with an interest rate decision expected tomorrow. The Fed is widely expected to raise interest rates—namely its benchmark federal funds rate—by an additional 75 basis points (bps) in an attempt to combat inflation.

The Fed’s monetary policy stance in 2022 so far has been historically hawkish, with the Fed tightening monetary policy at its fastest pace in over 40 years, hiking interest rates by a cumulative 300 bps since March. The tightening of monetary policy has raised interest rates for a wide range of consumer loans, including mortgages and credit card loans, which are directly influenced by a higher fed funds rate. The average rate on a 30-year fixed-rate mortgage guaranteed by Freddie Mac recently surged above 7%—its highest level in over two decades, more than doubling since the beginning of the year.

The rapid pace of tightening this year marks a dramatic reversal from the previous two years, when the U.S. central bank lowered interest rates to record lows and restarted quantitative easing (QE), in an effort to stimulate an economy battered by the COVID-19 pandemic and related shutdowns. Treasury yields and mortgage rates fell to record lows in 2020 and 2021, partly as a result of the Fed’s accommodative monetary policy at the time.

-Mack