Atlas Macro

Central banks

Dovish

A policy stance that prioritizes promoting economic growth and employment, usually through lower interest rates and looser monetary supply. 'Doves' are more tolerant of inflation.

Key points

  • Signals possible rate cuts or bond buying (QE).
  • Has generally supported share and bond prices.
  • Tends to weaken the currency.

Example

A central banker saying "we may cut rates if inflation keeps falling" is dovish; bond yields and the dollar typically fall in response.

In history

In January 2019 the Fed signalled it would pause its rate rises. The S&P 500 rose about 29% over 2019.

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