Hawkish

Hawkish means favoring tighter monetary policy to fight inflation. In simple terms, a hawkish central bank or policymaker is more willing to keep interest rates high or raise them. Hawkish language is important because it can make investors expect higher borrowing costs and tighter financial conditions. This can pressure stocks and support bond yields or the currency. For example, if a Fed official says inflation is too high and more rate hikes may be needed, that is a hawkish message. Hawkish does not mean the central bank wants to hurt the economy. It means controlling inflation is being treated as a major priority.