{"668385":{"#nid":"668385","#data":{"type":"news","title":"Dataset of Committee\u0027s Public Comms Yields New Insights into Federal Reserve\u0027s Influence","body":[{"value":"\u003Cp\u003EAn investment strategy based on findings culled from a new dataset is proving that it can provide substantially better financial returns than a traditional \u201cbuy and hold\u201d approach.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThe dataset compiles meeting minutes, speeches, and press conference transcripts from the Federal Open Market Committee (FOMC). It is the largest tokenized and annotated dataset of its kind.\u003C\/p\u003E\r\n\r\n\u003Cp\u003EAn investment strategy developed using the dataset predicted investment returns yielding 163.4% higher than the buy and hold method on the QQQ index fund from 2011 to 2022.\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThe dataset and strategy are part of\u0026nbsp;\u003Ca href=\u0022https:\/\/arxiv.org\/abs\/2305.07972\u0022\u003Enew research findings from Georgia Tech\u003C\/a\u003E. The findings document the influence the FOMC has on markets and the economy through its public communications. The research is being presented this month at the 61st Annual Meeting of the Association for Computational Linguistics (ACL 2023).\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u201cBy understanding the impact of FOMC communications on market movements, investors can make more informed decisions, and potentially protect their portfolios from sudden downturns or capitalize on growth opportunities,\u201d said Ph.D. student and lead researcher\u0026nbsp;\u003Cstrong\u003EAgam Shah\u003C\/strong\u003E.\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u201cAdditionally, it can help economists at the Federal Reserve Banks more efficiently understand the impact of their communication.\u201d\u003C\/p\u003E\r\n\r\n\u003Cp\u003E[\u003Ca href=\u0022https:\/\/sites.gatech.edu\/research\/acl-2023\/\u0022\u003EMICROSITE: Georgia Tech at ACL 2023\u003C\/a\u003E]\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThe dataset contains 214 meeting minutes, 1,026 speeches, and transcripts from 63 press conferences. The meeting minutes and speeches span from January 1996 to October 2022. The press conference archive dates from April 2011 to October 2022.\u003C\/p\u003E\r\n\r\n\u003Cp\u003ETo explore this heap of FOMC pronouncements, Shah and his team crafted a novel machine-learning classification task. The new task categorized statements in the dataset as hawkish, dovish, or neutral, rather than just positive, negative, or neutral.\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThe classification task allows computer models to understand FOMC policy stances through the language used in their correspondence. This in turn guides models to predict how markets react to communications, giving investors valuable information to form their own strategies.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u201cOne of the reasons our research achieved these remarkable results is because it harnesses the power of natural language processing (NLP) to systematically analyze a vast amount of data which is impractical for humans to process effectively,\u201d Shah said. \u201cThis provides a much more nuanced understanding of the market\u2019s response to FOMC communications.\u201d\u003C\/p\u003E\r\n\r\n\u003Cp\u003EShah is a Ph.D. student in the School of Computational Science and Engineering (CSE). He is advised by\u0026nbsp;\u003Cstrong\u003ESudheer Chava\u003C\/strong\u003E, a professor in the Scheller College of Business.\u0026nbsp;\u003Cstrong\u003ESuvan Paturi\u003C\/strong\u003E, a Georgia Tech alumnus and software engineer at Nasdaq eVestment, co-authored the paper with Shah and Chava.\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThe group will present their paper at a time when the FOMC and the Federal Reserve are in news headlines now more than ever. To curb inflation, the Fed has increased interest rates ten consecutive times from March 2022 to June 2023.\u003C\/p\u003E\r\n\r\n\u003Cp\u003EOne example that inspired the group occurred during this period on Aug. 26, 2022. Here, FOMC Chair Jerome Powell gave an eight-minute speech that resulted in an almost $3 trillion decline in U.S. equity market value.\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThis study not only affirms that markets are reactive to words spoken through public communications but now those effects can be measured and predicted. It also provides new tools to help investors make better, more informed decisions.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u201cThe application of computational methods to finance and economics revolutionizes the way analysts interpret data. It enables us to handle enormous datasets and extract valuable insights that would otherwise remain hidden,\u201d Shah said.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u201cThis empowers decision-makers to craft strategies that are based on a deeper understanding of market dynamics, leading to potentially higher returns and more efficient financial systems.\u201d\u003C\/p\u003E\r\n","summary":"","format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"\u003Cp\u003ENew Georgia Tech research may help investors make more informed decisions and potentially capitalize on growth opportunities. The research team has created\u0026nbsp;a dataset compiling meeting minutes, speeches, and press conference transcripts from the Federal Open Market Committee. It is the largest tokenized and annotated dataset of its kind.\u003C\/p\u003E\r\n","format":"limited_html"}],"field_summary_sentence":[{"value":"New Georgia Tech research may help investors make more informed decisions and potentially capitalize on growth opportunities."}],"uid":"32045","created_gmt":"2023-07-07 12:53:49","changed_gmt":"2023-07-12 18:09:28","author":"Ben Snedeker","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2023-07-07T00:00:00-04:00","iso_date":"2023-07-07T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"671125":{"id":"671125","type":"image","title":"Finance Dataset.jpeg","body":null,"created":"1688734440","gmt_created":"2023-07-07 12:54:00","changed":"1688734440","gmt_changed":"2023-07-07 12:54:00","alt":"Conceptual digital graphic depicting rising financial markets ","file":{"fid":"254132","name":"Finance Dataset.jpeg","image_path":"\/sites\/default\/files\/2023\/07\/07\/Finance%20Dataset.jpeg","image_full_path":"http:\/\/hg.gatech.edu\/\/sites\/default\/files\/2023\/07\/07\/Finance%20Dataset.jpeg","mime":"image\/jpeg","size":52932,"path_740":"http:\/\/hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/2023\/07\/07\/Finance%20Dataset.jpeg?itok=WpTrqxfh"}}},"media_ids":["671125"],"groups":[{"id":"47223","name":"College of Computing"},{"id":"50877","name":"School of Computational Science and Engineering"},{"id":"1188","name":"Research Horizons"}],"categories":[{"id":"139","name":"Business"},{"id":"153","name":"Computer Science\/Information Technology and Security"},{"id":"131","name":"Economic Development and Policy"},{"id":"135","name":"Research"},{"id":"8862","name":"Student Research"}],"keywords":[{"id":"192824","name":"dataset"},{"id":"108691","name":"Federal Reserve"},{"id":"192825","name":"FOMC"},{"id":"11559","name":"CSE computational science engineering"},{"id":"187915","name":"go-researchnews"}],"core_research_areas":[{"id":"39501","name":"People and Technology"}],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003EBryant Wine, Comms. Officer I\u003Cbr \/\u003E\r\nSchool of Computational Science \u0026amp; Engineering\u003Cbr \/\u003E\r\nBryant.wine@cc.gatech.edu\u003C\/p\u003E\r\n","format":"limited_html"}],"email":["Bryant.wine@cc.gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}