What is a dove? What does dovish mean in finance?

In finance a dove is someone who believes that the best way to encourage economic growth is through monetary policies that involve keeping interest rates low.

A dovish economic policy believes that by keeping rates low, there will be a surge in demand for consumer borrowing and an increase in the amount of consumer spending.

A dove believes that the negative effects of their monetary policies, such as inflation, have a small impact in the grand scheme of encouraging economic growth.

The term is derived from the docile and gentle nature of the bird (with the same name).

A dove is the opposite of a “hawk” – economists in favor of high interest rates in order to keep inflation in check.

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