A dove or dovish stance refers to a monetary policy approach that favors lower interest rates, economic stimulus, and accommodative measures to support economic growth and employment. Dovish policymakers prioritize reducing unemployment over controlling inflation and typically support quantitative easing, low rates, and fiscal stimulus during economic weakness.

Dovish policy signals significantly impact financial markets, typically supporting stock prices and weakening currency values. Bond prices often rise on dovish announcements as investors anticipate lower future interest rates. Understanding central banker rhetoric and policy bias helps traders position for potential policy changes and market reactions.

Real-world example: Federal Reserve Chair signals dovish policy stance citing employment concerns, causing USD to weaken, bonds to rally, and stocks to surge as traders anticipate continued accommodative monetary policy.