JPMorgan’s AI puts 25 years of Fed speeches into a hawk-dove score

Plotting the index against a range of asset performances, JP Morgan economists found that the AI tool can be useful in potentially predicting changes in policy – and give off tradeable signals. — Bloomberg

NEW YORK: A week before the Federal Reserve’s (Fed) next meeting, JPMorgan Chase & Co unveiled an artificial intelligence (AI)-powered model that aims to decipher the central bank’s messaging and uncover potential trading signals.

Based off on Fed statements and central-banker speeches going back 25 years, the firm’s economists including Joseph Lupton employed a ChatGPT-based language model to detect the tenor of policy signals, effectively rating them on a scale from easy to restrictive in what JPMorgan is calling the Hawk-Dove Score.