Dovish

Dovish – or to be a dove – means to believe that low interest rates will improve the health of the economy. The term is usually reserved for Central bank members but can also be used to describe politicians or journalists who campaign for low rates.

Doves argue that low interest rates boost the economy by encouraging people to borrow and spend more. If interest rates are low, people are more likely to take out mortgages, loans or credit cards and spend more money. This is known as ‘loose’ monetary policy.

This extra spending creates more jobs across all sectors, from retail and manufacturing to housing. Extra demand causes prices to increase at the same time that higher employment is pushing up wages.

See hawkish.

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