The Fed minutes have been released, and they showed that the market interpreted previous actions in a more "hawkish" context than was warranted. The doves remain firmly in control despite what may have been a tactical victory for the hawks on inflation. There appear to be seven members who are very hawkish and want to raise rates as early as 2022, whereas thirteen are now settled on 2023.

The headline of the minutes is still that the Fed may need to pull back support because of a stronger-than-expected economic recovery and levels of growth. Some hawkish Fed officials pointed to stronger than expected economic metrics as a reason to taper sooner, while others cited weaker than expected data in the jobs market. The tight labor market is complicated by empowered workers who appear to be quite confident to quit their current job to seek a better one. The "quit-rate" is just off its all-time highs but still high historically speaking.

One thing is clear from the minutes, those who expected sooner taper action will likely be disappointed. Despite the committee having some vocal hawks, it is clear that much more progress will be required on the employment front before that happens. Inflation has certainly had more strength and breadth than the Fed officials expected but the impl...
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