Central Bank Hawks and Doves Cheat Sheet

The views of InTouch Capital Markets on the hawks and doves at the European Central Bank (ECB), the FOMC and the Bank of England (BoE) and a recap on the current and future voting members.  We get asked all the time questions like “is the Fed’s Rosengren a hawk or a dove?”, “who are the doves on the ECB?” and “are the voters on the FOMC this year more dovish or hawkish?”.  Here we answer all these questions.

New Absolute Hawk/Dove Scale

We have updated our analysis to introduce a new absolute hawk/dove scale alongside the relative scale we had before, so that it would be easier to understand the position of each central banker. The lowest bound on the scale is 1, indicating “very dovish” members and the upper bound is 5, specifying “very hawkish” members, while 3 represents “no known bias”.

FOMC Hawks, Doves and Voters

FOMC Update – 22nd May. What’s Changed?

There had not been any major changes in the last FOMC Meeting, but we had a couple of comments from the Committee members. Most of these comments were focused on reiterating that Fed’s view on negative interest rates has not changed and it is something they are not looking at. Other than that, we decided to move Clarida (Vice Chairman) one position higher on the scale, after he highlighted that “Fed will do more if necessary” and “Yield curve control is a natural compliment to guidance”. Finally, we got some very dovish comments from Kaplan (Dallas) during the last two weeks, as he stated that “Fed will be running a very accommodative monetary policy for an extended period” and “more stimulus will be necessary”.

ECB Hawks, Doves and Voters

FOMC Update – 22nd May. What’s Changed?

There had not been any major changes in the last FOMC Meeting, but we had a couple of comments from the Committee members. Most of these comments were focused on reiterating that Fed’s view on negative interest rates has not changed and it is something they are not looking at. Other than that, we decided to move Clarida (Vice Chairman) one position higher on the scale, after he highlighted that “Fed will do more if necessary” and “Yield curve control is a natural compliment to guidance”. Finally, we got some very dovish comments from Kaplan (Dallas) during the last two weeks, as he stated that “Fed will be running a very accommodative monetary policy for an extended period” and “more stimulus will be necessary”.

Bank of England (BoE) MPC Hawks, Doves and Voters

BoE Updated – 22nd May.  What’s Changed?

In the last meeting, MPC voted unanimously to leave interest rates unchanged, while Saunders and Haskel were in favour of a bond purchase increase by £100bn. During the last two weeks however, we got a couple of comments from Tenreyro, Haldane, Bailey and Ramsden, indicating that BoE is more open-minded on negative rates and it has moved from its critical stance against them. Consequently, we decided to move these members to the more dovish side of the scale and leave only Broadbent as the person with “No-Known Bias”. Other than that, it seems that all members are now in support of more QE in the June meeting.

What is a Central Bank Hawk or Dove?

In general, “hawks” are the members who tend to want tighter monetary policy to temper inflation and growth whilst “doves” tend to want looser monetary policy to support growth and inflation.

Note – InTouch Capital Markets bases its classifications of hawks and doves on recent speeches and voting patterns by the respective members but all views are subjective – very few central bankers actually describe themselves as a hawk or dove. Our views may differ a little from others’. It’s also worth considering that some members tend to stick to being always hawkish or dovish, whilst others tend to be more flexible in their views, switching from time to time.

Authors: Evangelos Doulamis, Michael Colman