hawkish adjective Definition, pictures, pronunciation and usage notes

monetary policies
investor accounts lose

A Dovish policy is usually applied in a period of recession or overheating of the economy. The Prime Minister could count on the support of a hawkish majority in Parliament to support the invasion. Definition and synonyms of hawkish from the online English dictionary from Macmillan Education. Plus500UK Ltd is authorised and regulated by the Financial Conduct Authority .


Hawkish refers to when a central bank’s policymakers talk about raising interest rates, slowing down economic growth, or even easing up on inflationary pressures. Hawkish policies and policymakers tend to be mostly concerned about the risk of inflation. They try to keep a lid on rising prices and wages by increasing interest rates, reducing the supply of money and limiting the growth of the economy.

In order to moderate the rise in prices and wages, this tendency will pursue higher interest rates and a tighter money supply. Remember that monetary policy is just one of a number of aspects that should be considered when making trading decisions. Always conduct due diligence before trading, looking at the number of factors, including the latest market trends and news, and a wide range of analysis. The term “hawk” is given to central bank economists who advocate more for price stability over maximum employment. This type of monetary policy is used when there is a concern that inflation is or will be higher than the Fed’s target of 2%. The Federal Reserve wants to keep inflation at 2% in the long run as it believes that allows a consistent balance between price stability and maximum employment.

More from Merriam-Webster on hawkish

They are commonly used by analysts and traders ahead of monetary policy meetings to help anticipate the outcome of a vote. We now know that interest rates are ultimately affected by a central bank’s view on the economy and price stability, which influence monetary policy. When the home currency strengthens, the prices of imported foreign goods become relatively cheaper, hurting domestic producers.

With lower demand, prices would fall, helping to tamper inflation—and businesses would hire fewer workers, or maybe even let some go. When hawks control monetary policy, investors are looking for assets that will perform well in a rising interest rate environment. This attitude has a marked impact especially when it comes to income-generating investments. Fixed-income investors in a hawkish environment of rising rates will tend to avoid long-term fixed-rate bonds in favor of shorter-term bonds.

Key characteristics of monetary hawks

Raising the reserve requirement restricts bank lending and slows growth while lowering the reserve requirement releases more capital for banks to offer loans or buy additional assets. So if they are talking about increasing spending – it’s seen as a hawkish stance. All three of these possibilities can result in more investment into the economy and increase economic growth.

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For example, if a central bank raises interest rates to combat inflation, it could make borrowing more expensive for businesses and individuals, which could slow down economic activity. Similarly, reducing the money supply could make it more difficult for businesses to access capital, which could also have a negative impact on economic growth. Monetary hawkish policies may include raising interest rates, reducing the money supply, or implementing stricter lending requirements.

Supportive of warlike foreign policy; bellicose; inclined toward military action. When interest rates are low homeowners become interested in refinancing their properties to lower their mortgage payments. A refinancing calculator is a valuable tool in deciding whether it makes sense to opt for lower monthly payments. Join Macmillan Dictionary on Twitter and Facebook for daily word facts, quizzes and language news. Plus500AE Ltd is authorised and regulated by the Dubai Financial Services Authority .

Hawkish vs Dovish: How Do They Affect The Forex Market

An example of this, is the monetary policy pursued for years by Jean Claude Trichet at the ECB, which made fighting against inflation its priority. Given the fact that interest rates and reserve requirements can be changed overnight, it’s wise to factor inflation into your investment decisions. That’s where a free, easy-to-use inflation calculator can be invaluable. The information is provided for general purposes only, and does not take into account any personal circumstances or objectives. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice.

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From basic trading terms to trading jargon, you can find the explanation for a long list of trading terms here. Support of the Afghanistan War—the senator again appeared on Hannity’s show that evening—Carlson expanded his criticism of Graham’s Afghanistan record on Wednesday night. Use the word comparison feature to learn the differences between similar and commonly confused words. Close your vocabulary gaps with personalized learning that focuses on teaching the words you need to know. Compared to other contenders for the top job, he’s considered more hawkish. And assertive foreign policy to implant democracy and American values abroad.

A financial advisor can help you create an investment portfolio that can best handle both types of monetary policy. We have been able to give definition to the common context but it could also refer to someone who is predominantly focussed on a specific aspect of an endeavor or a pursuit. For example, inflation hawks are focussed on interest rates, budget hawks focus on the federal budget, among others. On the contrary, while a hawk focuses on high-interest rates, a dove prefers monetary policies which basically support low-interest rates.

Examples of a Dovish Policy

If economists had to summarize what does hawkish mean Chair Jerome Powell’s Jackson Hole speech in one word, they’d likely go with hawkish. If a Hawkish policy is unexpected, then you’ll likely see sudden spikes on your chart to take into account the unexpected Hawkish news release. If a Hawkish policy is expected, then the news is priced in and you’ll unlikely see sudden spikes on the chart.

What’s calmed markets during the banking stress? – RBC Wealth Management

What’s calmed markets during the banking stress?.

Posted: Wed, 29 Mar 2023 07:00:00 GMT [source]

Hawks are policy makers and advisors who favor higher interest rates to keep inflation in check. Past price trends are not indicative of future price trends and are not intended to be a proxy for historical or projected future performance of any specific artwork or Masterworks shares. Also, our materials may present comparisons between the historical price performance of a segment of the art market and other investment asset classes, such as stocks, bonds, real estate, and others.

https://g-markets.net/ is a contractionary monetary policy in which central banks increase interest rates to lower the country’s money supply. A rise in interest rate directly increases the country’s currency value in the forex market as higher interest rates attract more foreign investment that increases demand for the country’s currency. The appreciation of the currency in the forex market leads to a rise in demand for the particular currency pair, in turn increasing the currency value even further.

There are important differences between art and other asset classes. Quinlyn Manfull is a a New York based finance writer covering alternative investments, crypto, and NFTs. Previously she worked as an Investment Analyst for HSBC Private Bank covering capital markets. Her byline has been featured in the Anchorage Daily News, and her university newspaper, The Willamette Collegian. In Economics from Willamette University and holds her FINRA Series 7 License.

He is a professor of economics and has raised more than $4.5 billion in investment capital. IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority. If Turkey’s central bank is Dovish, then Turkish Lira will be relatively weaker than USD. So when a country adopts a Hawkish stance, demand for its currency will rise and appreciate. So, investors will move their funds from other countries to earn higher interest rates here. This subsequently increases the inter-bank borrowing rate, mortgage rate and fixed deposit rate.

hawkish monetary policy

A hawkish politician, also called a hawk or war hawk, might vote in favor of continuing a military operation instead of ending it, for example. The Fed’s hawkish interest rate policy appeared to be slowing inflation, but recent data has suggested otherwise. It is the Fed’s responsibility to balance economic growth and inflation, and it does this by manipulating interest rates. Loretta Mester, the Cleveland Fed president, also fits into this category. Mester studied under Charles Plosser, the former president of the Fed Bank of Philadelphia and a committed hawk. She worries about inflation caused by the low interest rates championed by doves.