what does it mean to be hawkish hawks are seen as willing to allow interest rates to rise in order to keep inflation under control even if it means sacrificing economic growth consumer spending and employment 
a hawk can be contrasted with a dove investopedia candra huffunderstanding inflation hawksa hawk generally favors relatively higher interest rates if they are needed to keep inflation in check in other words hawks are less concerned with economic growth and more focused on the potential of recessionary pressure brought to bear by high inflation rates whether being hawkish is a good or appropriate stance will depend on the strength of the economy and other macroeconomic factors this is because hawkish policies that can lower inflation can also lead to economic contraction and higher unemployment and can sometimes backfire and lead to deflation although it is common to use the term hawk as described here in terms of monetary policy it is also used in a variety of contexts in each case it refers to someone who is intently focused on a particular aspect of a larger pursuit or endeavor a budget hawk for example believes the federal budget is of the utmost importance a war hawk similarly pushes for armed conflict to resolve disputes as opposed to diplomacy or restraint the opposite of a hawk is known as a dove or an economic policy advisor who prefers monetary policies that involve low interest rates doves typically believe that lower rates will stimulate the economy leading to an increase in employment advantages and disadvantages of hawkish policiesalthough the term hawk is often levied as an insult high interest rates can carry economic advantages while they make it less likely for people to borrow funds they make it more likely that they will save money in some cases banks end up lending money more freely when interest rates are higher high rates dissipate risk making banks potentially more likely to approve borrowers with less than perfect credit histories moreover if a country increases interest rates but its trading partners do not that can result in a fall in the prices of imported goods higher interest rates can become deflationary making prices cheaper while this can be a short term positive deflation can often be worse than moderate inflation in the long run persistent deflation means that a dollar tomorrow will be worth more than one today and worth even more in a week or a month this incentivizes people to hoard money and put off large purchases until much later when ostensibly they will be even less expensive in terms of the dollar s greater purchasing power with higher interest rates consumers will borrow less and spend less on credit higher mortgage rates will also put a damper on the housing market and can cause housing prices to fall in turn higher rates on car loans can have a similar effect on the automobile market hawkish policies will likewise tend to reduce a company s desire to borrow and invest as the cost of loans and interest rates on bonds rise moreover companies will be less eager to hire and retrain workers in such an environment hawkish policies can also impact domestic manufacturers and trade if the relative inflation rate in the home country is falling relative to the inflation rate in a trading partner the exchange rate should adjust to keep prices in line with the dollar appreciating relative to the trading partners when the home currency strengthens the prices of imported foreign goods become relatively cheaper hurting domestic producers at the same time domestic exports become relatively more expensive for overseas consumers further hurting domestic manufacturing hawkish policies tend to favor savers and lenders who can enjoy higher interest rates they also make imports and traveling abroad cheaper hawkish policies tend to negatively impact borrowers and domestic manufacturers they also make exports and domestic tourism more expensive can stem runaway inflationincreases the savings ratecheaper importstourists to foreign destinations have greater purchasing powercan hurt domestic producersmakes borrowing more expensive for consumers and firmscan lead to deflationthese aren t the only instances in economics in which animals are used as descriptors bulls and bears are also used the former refers to a market affected by rising prices while the latter is typically one where prices are falling 