It is sad that adults need to speak about monetary or fiscal policy as if doves or hawks determine their fate. They are too weak-willed to feel the effects of actual losses, so they have to blame some animal. An animal that represents peace, like a dove, is viewed as something palatable. Rather than the hawk, which is an aggressive predator. However, the main problem with this metaphor is the fact that hawks are eating prey. But the Fed is not in competitive conflict with Wall Street, as an institution. Apparently individual Fed Presidents use their position to game the market just as much as Nasdaq chairmen.
That aside, fundamentally, speaking, killing a dove is seen as an act of war. Therefore, criticizing a Federal Reserve who is soft on the markets is viewed as killing a dove. That is part of the problem. Then bears get demonized for wanting to collect real earnings before they hibernate for the winter, right? A bull, which is really a cow with balls, is seen as a hero in America. The act of inflating the costs of things is seen as making money, even though it is not. Inherently there is nothing better or worse about either mentality. The point is, when are companies genuinely deserving of capital, and when are they not?
With that being said, the content of chair Powell’s communications isn’t dovish, hawkish, or anything else described by an animal. If you needed to correlate his attitude to a non-human living being, he would be much more like a snail. He moves too slowly to use even the 1 blunt tool he has at his disposal. If he did there’d be rate changes on a daily basis, not a monthly or quarterly basis. Maybe even intra-day rate changes, to keep up with the nonsense in the markets. Until they can do that, the Fed is not a factor.
With modern monetary theory in place, the higher rates go, the higher margin loan rates will go. People will pull out of crypto (and the dollar, and t-notes) and go into the same old bad stocks that tanked the markets in the first place. Until that cycle stops, it doesn’t matter what part of the food chain you pretend the Federal Reserve is in. They won’t be stopping the scams. That is up to you, and your own capital.
