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AI Tool Created by JPMorgan Analyzes Fed Speeches To Signal Trades

Investment banking giant JPMorgan has reportedly unveiled an artificial intelligence (AI) tool to analyze Federal Reserve statements and speeches to detect potential trading signals.

These Fed policy signals will be rated on a scale from easy to restrictive to derive what the bank has called a Hawk-Dove Score.

The AI tool will give analysts a way to detect policy shifts which could provide the bank with a heads-up on trading signals. “Preliminary applications are encouraging,” JPMorgan economist Joseph Lupton reportedly said.

The tool can be used to predict changes in central bank tightening. Hawkish policy statements for example could result in rising yields on one-year government bonds.

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