Contextualizing.."Dovish" describes a monetary policy stance that prioritizes economic growth, employment, and the reduction of unemployment, being more tolerant of short-term inflation. In general, a dovish approach implies lowering or maintaining low interest rates, facilitating access to credit and consequently stimulating consumption and investment. melhorinvestimento.net

Characteristics of a dovish stance

Focus on growth:

The main priority is economic growth and job creation, even if this may increase inflation in the short term.

Low interest rates:

Central banks adopt lower interest rates to make credit cheaper, which encourages consumption and investment.

Monetary expansion:

They may increase the money supply by purchasing government bonds, injecting money into the economy to facilitate credit.

Accessibility to credit:

Policies that make credit more accessible, stimulating productive activity.

Tolerance for inflation:

A greater flexibility in accepting a slightly higher level of inflation to boost the economy.

Contrast with the hawkish stance

The dovish stance contrasts with the hawkish, which is stricter, prioritizing inflation control through raising interest rates, even if this may slow down economic growth and increase unemployment.

The term "dovish"

The word comes from the English "dove," which means "dove." The dove, a symbol of peace and gentleness, represents the less restrictive and more flexible nature of this economic policy, as opposed to the "hawkish" stance, which symbolizes rigidity and concern for inflation.