Atlas Macro

Central banks

Hawkish

A policy stance that prioritizes controlling inflation, usually through higher interest rates and tighter monetary supply. 'Hawks' are willing to accept lower economic growth to keep prices stable.

Key points

  • Signals possible rate rises.
  • Tends to strengthen the currency and push bond prices down.
  • Often weighs on highly valued growth shares.

Example

A statement saying "inflation remains unacceptably high" is hawkish; markets price in more rate rises and bond yields go up.

In history

At Jackson Hole in August 2022, Jerome Powell warned that bringing inflation down would bring "some pain". The S&P 500 fell 3.4% that day and about 15% over the following seven weeks.

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