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A hawk is someone who favors a tighter monetary policy, which means higher interest rates, with the aim of keeping inflation in check.

This is often at the expense of economic growth, as higher interest rates discourage borrowing and encourage savings.

Higher interest rates tend to have a negative impact on equities and equity indices within the affected economy, as investors sell equities in favor of bonds, which are considered lower-risk investments that now offer stronger returns due to increased rates.

This can, in turn, causes the economy’s currency to rise.

Hawks and doves are terms used by analysts and traders to categorize members of central bank committees by their probable voting direction ahead of monetary policy meetings.

Hawks are those that want to see higher interest rates, while doves are those who would prefer interest rates to remain low.

Being “hawkish” refers to the tone of language when describing an aggressive stance or viewpoint regarding a specific economic event or action.

In forex, the terms  “hawkish” and “dovish” refer to the attitude of central bank officials toward managing the balance between inflation and growth.

Attitude Concern Wants
Hawkish Rising inflation Higher interest rates
Dovish Slowing economic growth Lower interest rates