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BofA: BoJ And Fed Are Most Dovish G-6 Central Banks


BofA has introduced a G-6 'Hawk Dove' spectrum "to compare monetary policy stances across the major central banks" based on their relative dovishness based on 7 criteria including inflation targeting, asset purchase programs, and forward guidance (see table below) in its latest Global Economic Weekly.

  • The conclusion is that since the Global Financial Crisis, "the Fed has made the biggest dovish shift. The BoC has made the smallest shift, while the ECB is dragging its feet." The BoJ is seen as the most dovish overall, followed in order by the Fed, RBA, ECB, BoE, and BoC.
  • BofA: "In a sense the Fed has "volunteered" to be uber-dovish while the BOJ really has little choice. Thus while we see little chance of the BoJ overshooting its target for the foreseeable future, we think the Fed will do just that in the next two years. That in turn means a de facto easing of Fed policy as real policy rates drop."
  • They note the rankings could change in the next few years, for instance the ECB may soon adopt a more explicitly symmetric inflation target, while the BoC will do a formal policy review in 2H 2021.

Source: BofA Global Economic Weekly

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