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Fed Sentiment Index
Fed Sentiment Index
Monitor changes in Federal Reserve policy sentiment and understand how shifts between hawkish and dovish communication may influence the US Dollar, interest rates and the wider currency market.
Current Fed Sentiment
A higher reading indicates a more hawkish policy tone; a lower reading indicates a more dovish tone.
Reading the signal
A reading around 100 represents a broadly neutral Federal Reserve policy tone.
What is the Fed Sentiment Index?
The Fed Sentiment Index is designed to provide a simplified view of the tone of Federal Reserve monetary-policy communication over time.
Federal Reserve Communication
Federal Reserve officials communicate their views on inflation, employment, economic growth and monetary policy through speeches, interviews, statements and other official communications.
Hawkish or Dovish
Changes in policy language can indicate whether the Federal Reserve's overall communication is becoming more restrictive or more supportive of monetary easing.
Market Context
Changes in monetary-policy expectations can influence currencies, Treasury yields, equities, commodities and other financial markets.
Fed Sentiment Over Time
Monitor the direction of Federal Reserve communication and identify periods when policy expectations have shifted.
Fed Sentiment Index
Why Fed Sentiment Matters
Monetary policy communication can influence market expectations before an actual interest-rate decision takes place.
Hawkish Fed
Neutral Fed
Dovish Fed
Read the Fed's direction, not just the headline.
The Fed Sentiment Index is best used as part of a wider market-analysis framework. A single reading should not be treated as a standalone forecast of the next FOMC decision.
Monetary policy can change the currency environment before the rate decision arrives.
Market intelligence is one part of an effective currency risk-management strategy. Understanding the direction of monetary policy can help businesses assess the environment surrounding their international currency exposure.
How the Fed Sentiment Index should be interpreted
The Currency Hedger Fed Sentiment Index is intended to provide a consolidated representation of the direction of Federal Reserve policy communication. The index should be interpreted as a sentiment indicator rather than a direct forecast of future interest-rate decisions.
A reference value of 100 represents a neutral policy tone. Readings above 100 indicate an increasingly hawkish tone, while readings below 100 indicate an increasingly dovish tone.
- Higher readings indicate a more hawkish policy signal.
- Lower readings indicate a more dovish policy signal.
- Changes should be assessed over time rather than in isolation.
- The indicator should be considered alongside economic data and market pricing.
- The index is not a recommendation to buy or sell any financial instrument.
Federal Reserve communication can influence financial conditions and market expectations, even though asset prices themselves are not the direct target of monetary policy.
Fed Policy & Market Expectations
The sentiment indicator should be read alongside official Federal Reserve statements, minutes, economic projections and incoming economic data.
Federal Funds Rate
Monitor the current Federal Reserve target range and changes in official monetary-policy decisions.
FOMC Meetings
Follow scheduled Federal Open Market Committee meetings, statements, minutes and policy announcements.
Watch the Communication
Speeches, minutes, statements and press conferences can provide additional information about how policymakers assess inflation, employment and economic conditions.
Manage Currency Risk With Greater Confidence
Market intelligence is only one part of an effective currency risk-management strategy. Speak with a Currency Hedger FX specialist about your international currency exposure.
TALK TO AN FX SPECIALISTImportant information: The Currency Hedger Fed Sentiment Index is provided for informational and analytical purposes only. It is not intended to constitute investment, financial, legal or tax advice and should not be interpreted as a recommendation to buy, sell or hold any currency, security, commodity or other financial instrument. Market relationships described on this page are potential relationships and are not guaranteed outcomes. Historical information is not indicative of future results. Users should undertake their own research and obtain appropriate professional advice before making financial decisions.