Hawkish Fed signal in algorithm

According to Bloomberg Economics’ algorithm that examines Fed statements, it is possible that Fed Chair Jerome Powell will hawkish his messages. According to the Fedspeak Benchmark Index, developed by Bloomberg Economics’ natural language processing algorithm that examines more than 60,000 Fed news items, Fed Chair Jerome Powell is likely to make more hawkish statements this week. The Fedspeak Benchmark Index had revealed in December that Powell had turned to dovish messages in favor of rate cuts. In recent weeks, the index turned upwards from its April lows after above-expected inflation data came in and Fed members expressed their expectations for tight policy to continue. However, the fact that the index is still far from its December level indicates that the Fed’s hawkish tone may have only just begun. In the meantime, the question in the markets regarding the Fed’s rate cut is turning from “when will it do it?” to “will it do it?” Only one rate cut in 2024 has started to be priced in in swap markets.