Hawkish

The bird metaphor is deliberate: hawks are aggressive, and a hawkish policymaker is willing to accept slower growth or higher unemployment in order to bring inflation under control. When a central bank is described as hawkish, it signals that tighter monetary policy — higher borrowing costs — is either already in place or likely coming. Traders typically parse every word of central bank statements for hawkish signals because rate expectations drive prices across almost every asset class.

A hawkish shift can show up in subtle language. Phrases like "we remain vigilant on inflation" or "further firming may be appropriate" are read as hawkish cues even if no rate change is announced that day. This is why markets often move sharply on central bank statements alone, with no change in the actual policy rate.

Concretely: suppose a central bank governor says inflation is "unacceptably high" and hints at consecutive rate increases. Bond markets — where prices fall when interest rates rise — would typically sell off, and the domestic currency might strengthen as higher rates attract foreign capital. You can monitor rate decisions and their timing on the economic calendar. For the counterpart stance, see dovish.