From Tone to Trajectory: Continuous Sentiment and the Shape of Monetary Policy Communication
Central bank press conferences are not merely information releases --- they are structured narratives. We study whether the shape of sentiment within a statement, not just its average tone, carries policy-relevant signals. Constructing sentiment arcs for ECB and Fed press conferences along three dimensions --- monetary stance, economic outlook, and uncertainty --- we assess their predictive content for policy rate changes, inflation expectations, and forecaster disagreement. Our findings show that arc shape robustly predicts rate decisions beyond lexicon-based benchmarks at both institutions --- it is not merely whether a statement sounds hawkish or economically optimistic on average, but...
| Authors | Martin Feldkircher, Márton Kardos, Kristoffer Laigaard Nielbo |
|---|---|
| Primary category | cs.CL |
| Published | 24 August 2026 |
| Last updated at source | 24 August 2026 |
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