JPMorgan Introduces AI  Model That Deciphers Trading Signals

JPMorgan debuts AI model used to decipher Fed speeches for potential trading signals

JPMorgan Chase has revealed an AI-powered tool that analyses Federal Reserve comments to identify potential trading signals.

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The tool uses ChatGPT to assess the tone of policy signals from remarks made by the central bank, analyzing statements from the past 25 years.

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According to Bloomberg, JPMorgan economists used the model to rate comments on a scale from easy to restrictive, referring to the gauge as the "Hawk-Dove Score."

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In addition to identifying potential trading signals, the tool can also predict changes in central bank tightening.

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Joseph Lupton and other colleagues at JPMorgan wrote in a recent note that the preliminary applications of the Hawk-Dove Score are encouraging.

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The tool is not only limited to the Federal Reserve, as it can also be used for the Bank of England and the European Central Bank.

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Furthermore, the Hawk-Dove Score is set to expand to 30 other central banks in the near future.

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