[New York 9th Reuters]-Trump's posts on Twitter often shake the financial market in an unpredictable way, but JP Morgan quantifies the impact of Trump's tweets on the US interest rate market, A new index was devised.
A JP Morgan analyst uses machine learning techniques and a unique volatility model to analyze how much a 280-character presidential tweet has impacted US interest rate market movements. The "Volfefe" index that quantifies it was constructed.
The name was named after the unknown word “covfefe” used in an incomplete tweet posted by Trump in 2017.
The index can explain some of the interest rate movements in the market, especially two-year and five-year.
Mr. Trump's tweets are the ones that move the market the most. The tweets about monetary policy are not as much as trade, but they have a significant impact on the market. Also includes words such as “China”, “billion”, “products”, “dollars”, “tariffs”, “trade” The tweet has a significant impact on the market.
The number of tweets that drive Trump's market seems to be on the rise, but the number of likes and retweets are decreasing.
JP Morgan analysts explain that the same analysis can be done for stocks and foreign exchange markets in addition to the US interest rate market.
/cloudfront-eu-central-1.images.arcpublishing.com/prisa/HWNXJOM4ENEOHCQN3NSKWWMECM.jpg)
/cloudfront-eu-central-1.images.arcpublishing.com/prisa/MHGXPOLQYQNCEWO3X4B45KQDNA.jpg)