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Hanging Robust? AI Sentiment Reveals Hawkish Fed – Data Leaders Capital Receive US

After yesterday’s testimony by Fed Chair Jerome Powell to the US Home of Representatives I analyzed its sentiment on key points in comparison with his earlier 4 FOMC coverage statements, utilizing ChatGPT. The desk under exhibits the outcomes.

Unsurprisingly, ChatGPT left the sentiment for each inflation and inflation outlook unchanged, hinting on the Fed’s continued hawkishness.

Subsequent, to check for any shift in sentiment, I checked out latest FOMC member speeches by three Fed governors who addressed Fed coverage during the last month, summarized right here by ChatGPT.

Abstract of Governor Phillip Jefferson’s Speech (one speech):

  • Jefferson maintains a cautious strategy, specializing in monetary stability dangers and vulnerabilities, with no important change in stance.
  • Emphasizes the significance of monitoring monetary stability dangers and the potential impression on financial coverage selections.
  • Acknowledges the continued challenges posed by the COVID-19 pandemic and the necessity for a vigilant and adaptable strategy.

Governor Christopher Waller’s Speeches (three speeches):

  • Waller acknowledges the interconnections between monetary stability and financial coverage, with a cautious strategy concerning the latest strains within the banking sector.
  • Highlights the separate and distinct nature of the instruments used for monetary stability and financial coverage.
  • Stresses the effectiveness of focused monetary stability instruments in addressing strains within the banking system.

Governor Michelle Bowman’s Speech (two speeches):

  • Bowman shares considerations about inflation, supporting additional charge will increase to deliver it down, aligning with a hawkish stance.
  • Acknowledges the position of pandemic-related provide and demand components and expansionary fiscal coverage in contributing to excessive inflation.
  • Advocates for a sufficiently restrictive stance of financial coverage to meaningfully and durably deliver inflation down.

Abstract of sentiment:

  • Jefferson maintains a cautious strategy, emphasizing monetary stability and the necessity for vigilance in a altering financial surroundings.
  • Waller acknowledges interconnections between monetary stability and financial coverage however doesn’t point out a major change in stance.
  • Bowman’s remarks align with a extra hawkish view, advocating for extra charge will increase to deal with excessive inflation.

Right here, for instance, in at the moment’s speech entitled, “Fed Listens: Transitioning to the Publish-Pandemic Economic system,” we are able to see Bowman’s emphasis on persistent inflation (supply: FederalReserve.gov).

Hanging Robust? AI Sentiment Reveals Hawkish Fed - Data Leaders Capital Receive US Obtain US

At the moment, Bowman ranks among the many “Most Hawkish” FOMC members in an more and more hawkish and polarized Fed, based on Bloomberg’s Fed Spectometer (under).

Hanging Robust? AI Sentiment Reveals Hawkish Fed - Data Leaders Capital Receive US Obtain US

In comparison with final 12 months’s Spectrometer, we see extra members marked “N” for impartial in 2022 than in 2023. Will sentiment stay hawkish? We’ll proceed to watch FOMC responses to new financial releases over the subsequent month.

Hanging Robust? AI Sentiment Reveals Hawkish Fed - Data Leaders Capital Receive US Obtain US

 

 

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