The essential guide to who's a policy hawk, and who's a dove, at the Fed, ECB, BoE and BoJ

Photo: Bob Levey/Getty Images

While it may have lost some of its sway to fiscal policy in recent months, monetary policy settings from major central banks still continues to dominate movements in financial markets.

You only has to look at the coordinated response from US Federal Reserve policymakers earlier this month when they took market pricing for a rate hike in March from a less-than-even chance to an absolute lock within the space of just two weeks.

The importance of central banks was further demonstrated overnight with an report from Reuters — this time citing unnamed sources from within the European Central Bank — that sent the euro and government bond yields tumbling on the premise that markets had misinterpreted remarks made by the bank following its March policy meeting that it was moving closer to normalising policy quicker than what many had expected.

They still have a strong grip on financial markets, meaning what individual members say remains of utmost importance.

Given that fact, it’s always good to know what they’re likely to say given what they’ve said in the past.

Are they are hawk, looking to lift rates quickly, or a dove, cautious in their views towards tightening policy? Or do they sit in between, often the most influential policymakers on markets given their ability to constantly surprise in either direction?

Knowing who sits in what camp before they speak can put many an investor ahead of the curve in terms of how markets are likely to react.

It’s something that economists at Citibank have obviously been scrutinising closely, releasing an updated scale of policy doves, neutrals and hawks fo the US Fed, ECB, BoE and BoJ.

First up is the US Fed. As a side note, voting FOMC members are shown in bold. Denis Lockhart, the former Atlanta Fed president, has also retired and will be replaced by Raphael Bostic in early June.

Source: Citi

Citi says that Daniel Tarullo will leave his post next month while Jeffrey Lacker, Richmond Fed president, will vacate the FOMC in October.

“Other major potential departures in 2018 include both Yellen and Fischer in the first half of the year. Dudley is due to retire in January 2019,” says Citi.

So that’s the Fed covered, but what about the ECB?

Here’s Citi’s assessment.

Source: Citi

And for the Bank of England.

Source: Citi

Citi notes that Kristin Forbes, the most hawkish member of the BoE in their opinion after she voted to hike rates earlier this month, will depart the bank in June.

And finally, here’s where Citi sees the current mix of policymakers at the Bank of Japan, widely perceived as the most dovish of all major central banks.

Source: Citi

There’s plenty to digest, but knowing what these policymakers have said in the past, and then being able to digest what they’re saying now, would be of benefit to any investor, particularly should they depart from previously held views.

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