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The Big Take
What 60,000 Headlines Say About the Fed’s Next Move
Fed Chair Jerome Powell’s dovish December pivot saved the US from recession. Now, getting inflation back under control requires a hawkish reversal.
Words are powerful. For the US economy, no-one’s more so than those of Fed Chair Jerome Powell.
Bloomberg Economics’ Fed sentiment index — powered by a natural language processing algorithm based on more than 60,000 Fed headlines — shows that in December, Powell delivered a major pivot. By hinting at a swifter shift toward rate cuts, he gave markets a boost and helped the economy dodge a downturn.