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 October.  What’s Changed?

Evans (Chicago), sounded very dovish on his recent comments, after saying that “Another rate cut would boost his confidence on inflation” and as such we pushed him up slightly to a more dovish position. In addition, Kaplan (Dallas), a member whose voting bias is unclear, noted that he sees one more rate cut in the near term in support of economic weakness and lower growth expectations. We brought him up 5 places to be the most dovish of the neutral members.

ECB Hawks, Doves and Voters

ECB Update – 22nd October.  What’s Changed?

We moved Visco (Italy), previously considered the second most dovish member, a couple of positions lower to join the “softer” doves, after saying that “There was not agreement on all the pieces of the package. Myself, I was not agreeing on some of the pieces” and calling ECB to “Be very careful of the possible negative effects of negative rates”. Hernández de Cos (Spain) took his place, as the second most dovish member, after highlighting that “Evidence suggests that we have not yet reached the reversal rate”.

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

BoE Update – 22nd October.  What’s Changed?

We switched places between Vlieghe and Ramsden. Both surprised the markets, with the former calling for more stimulus if Brexit uncertainty becomes entrenched and the latter highlighting that smooth Brexit would put rate hikes on the table. Otherwise, it’s probably fair to say there is less dispersion of views across the MPC lately with all members effectively in wait and see mode for any policy response required after hard/soft/delayed/no Brexit. At the last meeting, the MPC unanimously voted to maintain rates at 0.75%.

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