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 – 16th January.  What’s Changed?

Just a small change in the Neutral side of the Hawk-Dove Scale. We brought Kaplan (Dallas) a couple of positions lower, as he sounded confident that US will hit the inflation goal of 2% and that the economy will grow at 2-2.25% this year.

ECB Hawks, Doves and Voters

ECB Update – 16th January.  What’s Changed?

In this update, we welcome Panetta, the new member of the Executive Board who has replaced Cœuré. In Panetta’s most recent speech, he sounded a bit dovish after highlighting that “benefits of ECB policy outweigh side effects”. A minor tweak on the dovish side, included the switch between de Guindos and de Cos, as the former sounded more optimistic about the rebound of the Eurozone’s economy. Finally, Kazāks (Latvia) took the position of Rimšēvičs as governor of the Bank of Latvia.

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

BoE Updated – 16th January.  What’s Changed?

In this update, we see more dovish comments from MPC members. Specifically, in the morning of 10th Jan, Tenreyro surprised the markets by pointing out that while “the UK Labour Market is very tight,” downside inflation risks are sufficient to make her inclined towards a cut in rates. As such, we decided to move her up a couple of positions, to join the Most Dovish members Haskel and Saunders, who have already voted twice for rate cuts. Saunders, in his latest speech, explained his stance in the last two meetings. He repeated that UK data supports the need for immediate rate cuts. Also, we saw further dovish talks from Vlieghe, who told the FT that he is ready to cut rates in the next meeting unless he sees “an imminent and significant improvement in the UK data”. In addition, Governor Carney sounded dovish. Just two months before stepping down as governor of BoE, he indicated that he sees risks that weakness in UK activity “could persist” through the uncertain 2020 Brexit negotiation period. He said that there is a debate on the MPC about whether UK growth and inflation will be sufficiently robust or not, and he admitted that more near-term stimulus may now be required.

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