Meeting Minutes Sentiment Drift

Overview

Analyzes the sentiment shift between the FOMC press conference and the subsequently released meeting minutes. This pillar identifies subtle changes in tone that reveal the committee's true consensus, often missed by initial market reactions.

What It Does

This pillar uses Natural Language Processing (NLP) to score the sentiment of the Fed Chair's press conference transcript and the official FOMC meeting minutes. It quantifies the 'drift' by comparing the hawkish and dovish scores of both documents. The analysis highlights key phrases and shifts in language concerning inflation, employment, and economic risks.

Why It Matters

The market often reacts strongly to the live press conference, but the minutes provide a more complete picture of the committee's debate. A significant sentiment drift can signal that the initial market reaction was incomplete, creating opportunities to predict future policy moves and market corrections.

How It Works

First, we ingest and clean the transcripts from the FOMC press conference and the official minutes. Next, our NLP model, trained on central bank language, assigns a sentiment score to each document. Finally, we calculate the percentage difference between the scores to produce a 'Sentiment Drift' value, indicating a more hawkish or dovish tilt in the minutes.

Methodology

Sentiment is scored using a fine-tuned financial BERT model on a scale of -1 (most dovish) to +1 (most hawkish). The Drift Score is calculated as ((Minutes Score - Conference Score) / |Conference Score|) * 100. Analysis focuses on changes in word frequency for terms related to 'inflation', 'unemployment', 'risk', and 'uncertainty' between the two documents.

Edge & Advantage

This provides a contrarian signal three weeks after the FOMC meeting, catching the market off guard before it fully reprices the nuanced details revealed in the minutes.

Key Indicators

• Hawkish/Dovish Drift Score

  high

  The percentage change in sentiment score between the press conference and the minutes.

• Risk Balance Mentions

  high

  Changes in how risks to the economic outlook (upside or downside) are framed.

• Dissenting Opinion Tone

  medium

  The sentiment of any dissenting members' recorded opinions, indicating committee fracture.

Data Sources

• Federal Reserve FOMC Press Conference Transcripts

  Official transcripts of the Fed Chair's post-meeting press conference.

• Federal Reserve FOMC Meeting Minutes

  Detailed official minutes from the FOMC meeting, released three weeks after the policy decision.

Example Questions This Pillar Answers

• → Will the Federal Reserve raise the Fed Funds Rate at the next FOMC meeting?
• → Will the next FOMC statement be more hawkish than the last one?
• → Will the S&P 500 close lower in the week following the release of the FOMC minutes?

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