Did you know? Hawks and Doves

The terms ‘hawkish’ and ‘dovish’ in finance stem from the contrasting behaviours of hawks and doves. Hawkish policymakers focus on controlling inflation — often by raising interest rates — symbolising aggression and vigilance. In contrast, dovish officials aim to stimulate economic growth and reduce unemployment by keeping interest rates low — reflecting peace and gentleness.

A hawkish central bank tightens monetary policy to curb inflation, leading to higher borrowing costs and a stronger currency, but often at the expense of slowing economic growth. A dovish stance lowers interest rates to boost economic activity, encouraging borrowing and investing, even if it risks higher inflation.

Analysts monitor central bank communications for hawkish or dovish cues to make informed decisions, such as adjusting portfolios to hedge against inflation or capitalise on growth opportunities. So, when you hear about a hawkish Federal Reserve or a dovish European Central Bank, it's about more than avian metaphors — it's insight into strategies shaping global markets.