Fed Officials' Hawkish Index Rises to Highest Level Since Late 2023
Taylor Wilson
Bloomberg's Fedspeak hawk-dove index hit 5.83 in late June — the highest since late 2023 — marking a sharp reversal from the dovish tilt of 2024–early 2025. Prediction market Kalshi now prices a greater-than-50% chance of a rate hike this year.
What is this "hawk-dove index" actually measuring?
Bloomberg Economics runs a model called Fedspeak that tracks the sentiment of Fed officials' public remarks — the higher the number, the more hawkish (leaning toward rate hikes).
The index hit 5.83 in late June, its highest since late 2023. This means → the collective tone inside the Fed has swung hard from "ready to cut" to "may need to hike further."
In plain terms = through 2024 and into early 2025, officials were signaling rate cuts. That signal has now fully reversed.
Which key officials said what?
Cleveland Fed President Beth Hammack said this week that further rate increases may be needed to push inflation back to the 2% target — but she stopped short of explicitly backing a hike at the July meeting.
Fed Chair Kevin Warsh struck a harder tone on Wednesday: inflation expectations and inflation risk have both eased over the past four weeks, yet anyone who thinks the Fed will tolerate above-target inflation "will be disappointed."
This reflects a shared stance: neither will ease up until inflation hits target. The only disagreement is timing, not direction.
How is the market responding?
On prediction platform Kalshi, traders now price the probability of a Fed rate hike this year at above 50%. This means → market pricing has aligned with officials' hawkish tone — a year-end cut is no longer the base case.
The late-July FOMC meeting is the next critical checkpoint — it will test whether hawkish rhetoric can translate into actual policy action.
In plain terms = talking tough and actually hiking are still two different things, but the market is already betting on a hike.
Content is for reference only, not financial advice.