Hawkish
Hawkish describes a central bank leaning toward higher interest rates or tighter policy, which usually supports its currency.
Hawkish means a central bank leans toward higher rates or tighter policy. Hawkish surprises usually strengthen the currency because higher rates attract capital.
Hawkish describes a central bank or policymaker inclined toward tighter monetary policy: higher interest rates, reduced bond buying, or a faster path to restrictive policy. Hawkish surprises tend to strengthen the currency because higher rates attract capital. The term comes from the hawk's aggressive character, the opposite of dovish.
How It Works
- Used to describe rate decisions, statements, minutes and individual speeches
- A hawkish hold (keeping rates while signalling hikes ahead) can move markets more than a cut
- The opposite is dovish
Trading Tips
Compare the statement to what the market already priced - a hawkish surprise moves more than a hawkish expectation
Hawkish central banks make their currency a favourite for carry trades
Related Terms
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