- Her conclusions are based on an analysis of speeches by Fed and central bank governors over the past 25 years
- The model takes into account the correlation between statements and subsequent changes in the market
- It is expected that the Fed will continue to “tighten the screws”
- Hence, the rate of BTC and other cryptoassets will fall
JPMorgan Chase & Co unveiled a new AI-based model to track potential market signals.
The service draws its conclusions from an analysis of statements by Fed chairs and central bank governors over the past 25 years.
This tool is based on the ChatGPT language model.. Based on the statements and subsequent changes in the market, the bot determines what future regulatory policy will be.
Comparing the results of the study with the Hawk-Dove index, JPMorgan economists noticed a certain correlation.
So, for example, the Fed chairmen’s hawkish mood ahead of the next interest rate announcement suggests a “tightening of the screws.”
“Preliminary results are encouraging,” commented Joseph Lapton, lead economist for the study.
JPMorgan predicts that the Fed is likely to continue tightening the screws. And that means demand for high-risk assets will fall.
In the future, the company plans to expand the model’s coverage to 30 central banks. This will improve the accuracy of the results.
The Fed is expected to raise the interest rate by another 25 bps, to 5.25%.. Whether this prediction will be accurate will be seen next week.