Fed to consider raising interest rates next week

Hawks vs. doves doesn't sound like a fair fight. Doves coo and eat seeds. Hawks screech and eat doves. But in the parlance of the bond market, the doves are winning.

In Federal Reserve speak, to be hawkish means supporting the idea of higher interest rates. Doves, meantime, are comfortable keeping rates where they are. When the Fed's interest rate-setting committee meets for two days in the week ahead, it is widely expected to not change rates.

That's one for the doves.

It was only four months ago when the central bank was predicted to be more hawkish and was expected to raise interest rates by 1 percent over the course of this year.

A third of the way through the year, and that prediction has been cut in half. Hawks have been roosting while the doves take flight.

In the past week, some in the Federal Reserve have tried to hunt down the doves. The president of the Federal Reserve Bank of Boston, Eric Rosengren, who will help decide the fate of the Fed's key interest rate, called a gradual increase to rates "absolutely appropriate" and warned that market expectations are too soft.

And Rosengren himself has been one of the doves.

Bond investors remain

unconvinced the hawks are gathering. The interest rate on the 10-year U.S. Treasury bond isn't too far off a five-year low. These investors need to listen closely Wednesday when the Fed announces its latest decision to hear if hawks are gathering on the horizon.

Financial journalist Tom Hudson, host of "The Sunshine Economy" on WLRN- FM in Miami, can be followed on Twitter @HudsonsView.

This story was originally published April 22, 2016 at 11:46 PM with the headline "Fed to consider raising interest rates next week ."