To boost economic growth, doves vote for looser monetary policy, keeping interest rates low. Increasing spending should benefit the economy and increase employment, but inflation could rise as a result.
Lower interest rates tend to encourage investors to move their money into higher-risk assets and discourage saving. A currency's value can be negatively affected by this, but its stock market can be positively impacted.

In trading and finance, being "dovish" refers to a monetary policy stance or the attitude of central banks that emphasizes a more accommodative approach. A dovish stance is characterized by a willingness to support economic growth and employment, often through measures like lower interest rates and increased liquidity in the financial system. Central bankers with a dovish outlook are generally more concerned about stimulating economic activity than about potential inflationary pressures.

When central banks express dovish sentiments, it can influence financial markets. Traders and investors interpret dovish signals as an indication that the central bank is likely to keep interest rates low or implement other measures to encourage borrowing and spending. Lower interest rates can make equities and other riskier assets more attractive, leading to increased buying activity in financial markets.

Key indicators of a dovish stance include statements or actions suggesting a commitment to monetary easing, concerns about sluggish economic growth, or a willingness to tolerate a temporary increase in inflation to support broader economic objectives.

Traders closely monitor central bank communications and policy decisions for dovish or hawkish signals to anticipate market movements and adjust their strategies accordingly. Understanding the dovish or hawkish sentiment is crucial for making informed decisions in the dynamic landscape of financial markets.