What Are “Hawkish” and “Dovish”? Central Bank Stance in Interest Rate Decisions

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  • Math

  • High School

  • 12th grade

  • Calculus and Advanced Math Concepts

  • English

Author's Instructions

Dovish stance refers to expansionary monetary policy, aimed at stimulating economic growth, which often leads to the depreciation of the related currency.

dovish stance is usually favorable for risky assets such as cryptocurrencies and stocks. In contrast, a hawkish stance describes a contractionary monetary policy, implemented to control economic inflation and generally results in currency appreciation.

Hawkish stances by the Federal Reserve often lead to corrections in risk markets.