Yellen Poised to Push Back at Inflation Hawks at Jackson Hole

NEW YORK (TheStreet) -- As of Thursday, the prevailing view among the top U.S. policymakers is the U.S. economy is not quite ready yet for the beginning of interest rate hikes. It's better to be safe and conservative than sorry.

Minutes released from the Federal Reserve's July 29-30 meeting were widely perceived by investors to be more hawkish than before, amplified in no small part by the increasing transparency of the inner workings of the world's most powerful central bank. However, a closer inspection of the text indicates that in many respects, the "doves" are still very much in control of the dialog and Fed Chair Janet Yellen still very much has the majority of the voting members on her side. Changes in the voting composition of the Federal Open Market Committee in 2015 are expected to result in a group even more focused on labor market slack.

Read More: Housing Is Heating Up: Does This Change Fed's Thinking?

All these dynamics are expected to be aptly reflected in Yellen's speech at 10 a.m. EDT Friday at the yearly symposium of global monetary policymakers in Jackson Hole, Wyo.

While the minutes of the Fed underscored the debate over policy normalization, in other ways the minutes appear no more hawkish than they had been for the past several meetings. They reiterated that the Fed as a whole continues to be very much data dependent.

The upshot is the same as its been in prior meetings: If the economy picks up momentum and continues to move toward the central bank's objectives, then the Fed will likely raise rates sooner. And on the other hand, if the Fed continues to see a wide gap between where the labor market currently stands and the need for the labor market to ramp up its use of resources, then the Fed will remain with its accommodative stance for longer than expected.

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