Dovish
A monetary policy stance favouring lower interest rates and easier financial conditions to support growth and employment — the opposite of hawkish.
A dovish central banker prioritises growth and employment over inflation control. Doves lean toward cutting rates, slowing rate hikes, or expanding the money supply — easing financial conditions.
Dovish pivots — or even hints of one — are powerful catalysts for risk assets. Lower expected rates compress the discount rate applied to equity earnings, compress credit spreads, and ease pressure on leveraged borrowers. Bond prices rise as yields fall.
The market hunts for "dovish pivots" relentlessly: the first sign a tightening cycle is ending can spark sharp rallies across equities, credit, and rate-sensitive sectors like real estate and utilities.
Related Terms
CME FedWatch
A CME tool that converts 30-day Fed Funds futures prices into market-implied probabilities of Fed rate moves at upcoming FOMC meetings.
IntermediateFederal Funds Rate
The overnight interest rate at which U.S. banks lend reserve balances to each other — the primary policy rate the Fed targets to steer the economy.
IntermediateFOMC
The Federal Open Market Committee — the Fed body that sets U.S. monetary policy, meeting eight times per year to vote on the federal funds rate target.
IntermediateHawkish
A monetary policy stance favouring higher interest rates and tighter financial conditions to combat inflation — the opposite of dovish.
IntermediateMonetary Policy
Central bank actions — rate changes, asset purchases, reserve requirements — designed to control inflation and support employment.
BeginnerRisk-On
A market sentiment regime where investors favor higher-risk assets — equities, high-yield credit, commodities, and EM — over safe havens.
BeginnerYield Curve
A graph of Treasury yields across all maturities — from 3 months to 30 years — that maps the term structure of interest rates at a given moment.
Intermediate