Fed chair’s tone of voice impacts stock prices – NBER paper

Study uses deep learning to study variations in tone, finding stocks respond but not bonds

Fed chair Jerome Powell

A central banker’s tone of voice may have an important impact on how markets respond to communication, new research finds.

Yuriy Gorodnichenko, Tho Pham and Oleksandr Talavera use deep learning techniques to study the “vocal emotions” conveyed by the Federal Reserve chair’s tone of voice. Though text analysis of central bank communication is increasingly common, the authors say they believe their study is the first to examine tone.

In the working paper, published by the National Bureau of

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