UBS Economics-Global Economics Strategy _Deep Speak An AI-driven read o...-117517390

ab29 August 2025Global ResearchPowered byUBS Evidence LabYESGlobal Economics & StrategyDeep Speak: An AI-driven read on tone shifts at the Fed, ECB and BoJA new LLM-based tracker of central bank sentiment and thematic focusWe developed an AI-based approach to measure policy tone for the Fed, ECB, and BoJ. Using LLMs, we analyze policy-relevant remarks in speeches and press conferences and score them on a hawkish/dovish scale, offering insights into sentiment shifts as well as thematic drivers and speakers' contributions. Updated daily, the dataset spans over two decades and is accessible via an interactive dashboard and a Python API (>Access Dataset). Fed: Dovish momentum builds as Powell pivots at Jackson HoleThe Fed's tone, which already turned dovish in our last issue, has softened further, helped by Powell's sharp pivot at Jackson Hole (Figure 9Powel hits dovish Jackson Hole trough ). This marks a reversal from July's FOMC, where we flagged the Chair delivered a very hawkish message just before the sharp downward revisions to the payroll data. This year's speech marked Powell's softest stance at Jackson Hole since 2021, with dovish labour market commentary dominating while inflation concerns slipped back to neutral (Figure 11Softest stance at Jackson Hole since 2021, driven by dovish labor market and growth remarks). Last year's speech was less dovish overall as persistent inflation warnings offset similar labor market concerns. Speaker dynamics add to the shift: Bowman's dovishness accelerated in August, Waller's stabilized, and Williams is now tilting dovish too (Figure 8 Bowman keps leading the dovish turn, Powel joins, Wiliams tilts dovish to).ECB: Turning less dovish, but not quite hawkish yetA quiet August - with Lagarde the only speaker from the Board - has kept the tone broadly unchanged since our last update. After the sharp dovish shift immediately following Liberation day, sentiment has since pared those losses and is now back at pre-dip levels (Figure 15Rebounding mode: ECB decisively climbing back towards neutral sentiment). The rebound is driven by a recovery in growth tone, while inflation concerns remain muted (Figure 17.and it's turning les dovish, while inflation concerns remain muted). BoJ: Sentiment stabilizes as Ueda hints at a hawkish tilt at Jackson HoleFollowing a June's dip, BoJ sentiment has steadied, marking a tentative pause in the dovish drift (Figure 22Tone diped in June after a steady rise but has now halted the dovish descent). This was partly supported by Governor's Ueda Jackson Hole speech, where he struck a hawkish tone (Figure 28Ueda shifted hawkish at Jackson Hole).Figure 1: Fed's dovish shift accelerates, ECB tone rebounds, BoJ's dovish drift stalling-0.30-0.25-0.20-0.15-0.10-0.050.000.050.100.1598990001020304050607080910111213141516171819202122232425Hawkish/Dovish Sentiment ScoreBOJECBFEDSource: Fed, ECB,BoJ, UBS Evidence Lab. >Access Dataset. Positive values indicate net hawkish sentiment, negativ