Hawk
Categories: Econ
A hawk, or an inflation hawk, as most commonly termed, is a person who advocates for high interest rates to keep inflation down, an aggressive monetary policy stance. They seek to "defend" the high value of U.S. currency relative to other currencies, despite that high cost U.S. dollar harming the sale of U.S. products into countries around the world.
Why not do as the hawks wish and be, uh...hawkish all the time?
Well, ultimately, central banks like the Fed are playing a balancing act: inflation on one side and balanced employment on the other. Lower unemployment often correlates with higher inflation, while higher unemployment often correlates with lower inflation (but not always...see: Stagflation).
Hawks ask, “Why worry about growth when we could worry about price stability?” Doves, on the other hand, ask the opposite.