Hawkish vs. Dovish
What Is Hawkish vs. Dovish?
"Hawkish" and "dovish" are the shorthand used to describe policymakers' leanings on monetary policy. A hawkish stance generally favors higher interest rates and tighter policy, typically out of concern about inflation. A dovish stance generally favors lower interest rates and easier policy, typically out of concern for growth and employment. The bird imagery captures the trade-off at the heart of the Fed's dual mandate: hawks prioritize guarding against rising prices, while doves prioritize supporting jobs and economic activity. Individual FOMC members, and the committee as a whole, are constantly described along this spectrum, and a given official's views can shift as economic conditions change.
Why It Matters
The hawk-dove language is everywhere in coverage of the Fed because it compresses a complex policy debate into an intuitive spectrum. Markets try to gauge whether the balance of the FOMC is tilting hawkish or dovish, since that tilt hints at where rates may head. A famously hawkish chapter was Paul Volcker's aggressive rate increases to break the high inflation of the late 1970s and early 1980s; deeply dovish stretches include the near-zero rates and asset purchases after the 2008 crisis and during the 2020 pandemic. Labeling a speech, a statement, or a dot-plot shift as hawkish or dovish is a quick way to summarize its policy implications.