Dovish vs hawkish.

In plain English

The labels describe which half of the Fed's dual mandate a policymaker is weighting more heavily at the moment, not a permanent identity, and the same official can sound dovish one year and hawkish the next. A dovish reading of the economy sees more slack, more room to grow without price pressure, and more risk in acting too soon. A hawkish reading sees tight labor markets, sticky inflation, and more risk in acting too late. Commentators apply the words to statements and speeches as well as to votes. The tone of a statement often moves markets more than the rate decision itself, because the decision is usually expected.

01Why it matters

The tilt of the committee shapes where mortgage, card, and savings rates head next, so reading the tone gives you a sense of the direction before any official change lands.

02The math, step by step

Say two officials see unemployment at 4.5 percent and inflation at 3 percent. The dove weights the half point of unemployment above target and argues for a 0.25 point cut. The hawk weights the full point of inflation above target and argues for holding. Same data, different priority.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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