This adjective originates from the word ‘Hawk’ – a strong, decisive bird - which has an analogy with the term ‘hawkish’ in the world of Forex. It refers to the tone of voice the Central Bank chooses when speaking about inflation. In case of the hawkish policy, radical measures will be taken to heighten interest rates.
The hawkish policy aims at slowing down economic growth, discourage investments in higher-risk assets, and promote saving. Stock and indices are usually not popular for trading during this period, while the currencies may bring solid returns. It may lead to the national currency rise.
The term is opposed to Dovish.
2020-07-23 • Updated