Investor Anatomy

Communications Interpretation Module

Fed Tone Decoder – Communications Interpretation Module.

Speaker: Philip N. Jefferson | Date: January 16, 2026 | Source: Speech

Labour Market: ✓ "labor market appear to be stabilizing" with "downside risks to employment appear to have risen" (1).
Inflation Concern: ✗ "inflation returns to a pathway toward our 2 percent objective" with expectations "declining from their peaks" (1).
Policy Bias: easing - "supported the FOMC's decisions to reduce the policy interest rate last year" to reach a "neutral rate" (1).
Risk Asymmetry: employment - "downside risks to employment appear to have risen" (1).
Internal Divergence: no - Jefferson's personal outlook.

Behavioural Feasibility: HOLD-BIASED

TONE: DOVISH — Emphasizes stabilizing labor market, declining inflation expectations, and recent policy easing to neutral levels.

Speaker: Michelle W. Bowman | Date: January 16, 2026 | Source: Speech

Labour Market: ✓ "labor market has become more fragile" with "downside risks" to employment (2).
Inflation Concern: ✗ "inflation moving closer to our goal" with "increasingly confident that inflation will come down" as tariff effects wane (2).
Policy Bias: easing - "supported cutting the policy rate last year" to "preemptively stabilize and support labor market conditions" (2).
Risk Asymmetry: employment - "fragility poses the greater risk" to the employment mandate (2).
Internal Divergence: no - Bowman's personal views.

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — Strong emphasis on labor market fragility and a proactive easing stance to mitigate employment risks.

Speaker: Michelle W. Bowman | Date: January 7, 2026 | Source: Speech

Labour Market: N/A - Focus is on supervision and regulation.
Inflation Concern: N/A - Focus is on supervision and regulation.
Policy Bias: data-dependent - Prioritizes "early detection and remediation of material financial risks" (3).
Risk Asymmetry: balanced - Focus on "safety and soundness and financial stability" (3).
Internal Divergence: no - Speech on regulatory agenda.

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Focused on bank regulatory reforms and supervisory efficiency without monetary policy signals.

Speaker: Jerome H. Powell | Date: January 11, 2026 | Source: Statement

Labour Market: N/A - Statement on Fed independence.
Inflation Concern: N/A - Statement on Fed independence.
Policy Bias: data-dependent - Fed "set interest rates based on evidence and economic conditions" (4).
Risk Asymmetry: balanced - Reaffirms focus on "price stability and maximum employment" mandates (4).
Internal Divergence: no - Statement on institutional independence.

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Strong defense of Fed's political independence and dual mandate focus, no specific policy signals.

Speaker: Stephen I. Miran | Date: December 15, 2025 | Source: Speech

Labour Market: ✓ "Unemployment has trended higher... wage growth lower," indicating a "loosening labor market" (5).
Inflation Concern: ✗ Expects "faster fall in PCE shelter inflation," "underlying inflation is running below 2.3 percent, within noise of our target" (5).
Policy Bias: easing - Advocates for "a quicker pace of easing policy" to avoid "unnecessarily tight" policy causing "job losses" (5).
Risk Asymmetry: employment - "labor market deterioration can occur quickly and nonlinearly and be difficult to reverse" (5).
Internal Divergence: no - Speech by one Board member.

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — Advocates for aggressive easing due to perceived underlying disinflation and rising employment risks.

Event: Rate Decision | Date: December 10, 2025

Policy Action: 25bps CUT

Context: Third consecutive 25bps cut since September, bringing the federal funds rate target to 3-1/2 to 3-3/4 percent (6).

Speaker: Jerome H. Powell | Date: December 10, 2025 | Source: Press Conf Transcript

Labour Market: ✓ "labor market appear to be gradually cooling" and "downside risks to employment appear to have risen" (7).
Inflation Concern: ✓ "inflation remains somewhat elevated," noting that "most of the inflation over target is from goods... tariffs" (7).
Policy Bias: easing - Committee "decided to lower our policy interest rate by 1/4 percentage point" (7).
Risk Asymmetry: balanced - Acknowledges "risks to inflation are tilted to the upside and risks to employment to the downside" (7).
Internal Divergence: ✓ "decision was clearly very divided", with "soft dissents from four others" and "strongly differing views about how to proceed in December" (7).

Behavioural Feasibility: HOLD-BIASED

TONE: DOVISH — Despite elevated inflation, the cut is justified by rising employment risks, with policy now near neutral.

Speaker: FOMC Participants | Date: December 10, 2025 | Source: SEP

Labour Market: ✓ Median unemployment rate for 2025 remains 4.5% (unchanged from Sep), but the risk assessment shows 13 participants weighted to upside risk for unemployment (8).
Inflation Concern: ✗ Median PCE inflation for 2025 (2.9%) and 2026 (2.4%) is slightly lower than Sep projections (8).
Policy Bias: data-dependent - Median federal funds rate projections remain unchanged from September (8).
Risk Asymmetry: employment - 13 participants weighted to downside risks for GDP, 13 weighted to upside for unemployment, suggesting focus on employment and growth (8).
Internal Divergence: ✓ FFR projections for 2025-2028 show a wide dispersion, indicating varied views on the appropriate policy path (8).

Behavioural Feasibility: HOLD-BIASED

TONE: DOVISH — Acknowledges higher unemployment risks and slightly lower inflation, but FFR path is unchanged, signaling a pause post-cut.

Speaker: FOMC | Date: December 10, 2025 | Source: FOMC Statement

Labour Market: ✓ "Job gains have slowed... unemployment rate has edged up... downside risks to employment rose" (6).
Inflation Concern: ✓ "Inflation has moved up since earlier in the year and remains somewhat elevated" (6).
Policy Bias: easing - "decided to lower the target range... by 1/4 percentage point" (6). Also "initiate purchases of shorter-term Treasury securities... to maintain an ample supply of reserves" (9).
Risk Asymmetry: balanced - "attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months" (6).
Internal Divergence: ✓ Three dissents (Miran for 1/2pt cut; Goolsbee and Schmid for no change) (9).

Behavioural Feasibility: HOLD-BIASED

TONE: DOVISH — Rate cut and initiation of reserve purchases indicate easing, balanced against elevated inflation concerns and explicit dissents.

Speaker: Jerome H. Powell | Date: December 1, 2025 | Source: Speech

Labour Market: N/A - Speech on George Shultz's legacy, no monetary policy discussion.
Inflation Concern: N/A - Speech on George Shultz's legacy, no monetary policy discussion.
Policy Bias: N/A - Powell explicitly states he "will not address current economic conditions or monetary policy" (10).
Risk Asymmetry: N/A - No policy risks discussed.
Internal Divergence: no - Personal remarks, no committee discussion.

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Administrative speech, explicitly avoids current economic or monetary policy discussion.

Speaker: Federal Reserve System | Date: November 2025 | Source: Beige Book

Labour Market: ✓ "Employment declined slightly," "weaker labor demand," "hiring freezes, replacement-only hiring, and attrition" (11).
Inflation Concern: ✓ "Prices rose moderately," "Input cost pressures were widespread... tariff-induced increases" (11).
Policy Bias: data-dependent - Describes current conditions, does not suggest policy action.
Risk Asymmetry: balanced - "increased risk of slower activity" (growth downside) vs. "upward cost pressures to persist" (inflation upside) (11).
Internal Divergence: ✓ Reports vary by District, showing mixed conditions across regions (11).

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Softening labor market and continued moderate price increases with tariff pressures, leading to a mixed outlook.

Event: Rate Decision | Date: October 29, 2025

Policy Action: 25bps CUT

Context: Second consecutive 25bps cut, bringing the federal funds rate target to 3-3/4 to 4 percent (12).

Speaker: Jerome H. Powell | Date: October 29, 2025 | Source: Press Conf Transcript

Labour Market: ✓ "labor market appear to be gradually cooling," "downside risks to employment appear to have risen" (13).
Inflation Concern: ✗ "inflation has eased significantly... but remains somewhat elevated," noting "inflation away from tariffs is actually not so far from our 2 percent goal" (13).
Policy Bias: easing - "decided to lower the target range... by 1/4 percentage point" and "conclude the reduction of our aggregate securities holdings as of December 1" (13).
Risk Asymmetry: balanced - "risks to inflation are tilted to the upside and risks to employment to the downside" (13).
Internal Divergence: ✓ "strongly differing views about how to proceed in December," with dissents for 1/2pt cut and no change (13).

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — Easing with a rate cut and ending quantitative tightening, while acknowledging balanced risks and internal divisions.

Speaker: FOMC | Date: October 29, 2025 | Source: FOMC Statement

Labour Market: ✓ "Job gains have slowed... unemployment rate has edged up... downside risks to employment rose" (12).
Inflation Concern: ✓ "Inflation has moved up since earlier in the year and remains somewhat elevated" (12).
Policy Bias: easing - "decided to lower the target range for the federal funds rate by 1/4 percentage point" (12). Committee decided to "conclude the reduction of its aggregate securities holdings on December 1" (12).
Risk Asymmetry: balanced - "attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months" (12).
Internal Divergence: ✓ Two dissents: Miran for a 1/2 percentage point cut, Schmid for no change (14).

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — Rate cut and decision to conclude balance sheet reduction signal an easing bias despite elevated inflation.

Speaker: FOMC | Date: October 28-29, 2025 | Source: Minutes

Labour Market: ✓ "job gains had slowed... unemployment rate had edged up," "downside risks to employment had risen" (15).
Inflation Concern: ✓ "inflation had moved up... remained somewhat elevated," "many participants... overall inflation had been above target for some time" (15).
Policy Bias: easing - "many participants were in favor of lowering the target range" for federal funds rate and "appropriate to conclude the reduction of the Committee's aggregate securities holdings on December 1" (15).
Risk Asymmetry: balanced - "upside risks to inflation remained elevated and that downside risks to employment were elevated and had increased" (15).
Internal Divergence: ✓ "strongly differing views about what policy decision would most likely be appropriate at the Committee's December meeting" (15).

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — Deliberations favored a rate cut and ending QT, signaling an easing stance despite persistent inflation and acknowledged two-sided risks.

Speaker: Federal Reserve System | Date: October 2025 | Source: Beige Book

Labour Market: ✓ "Employment levels were largely stable... demand for labor was generally muted" with "improved labor availability" (16).
Inflation Concern: ✓ "Prices rose further... input costs increased at a faster pace due to higher import costs" and tariffs (16).
Policy Bias: data-dependent - Describes current conditions, does not suggest policy action.
Risk Asymmetry: balanced - "downside risk to growth from a prolonged government shutdown" (employment/growth downside) (16) vs. "concerned about a possible acceleration of prices" (inflation upside) (16).
Internal Divergence: ✓ Reports vary by District regarding economic activity and outlook (16).

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Mixed economic signals with softening labor and rising price pressures from tariffs, suggesting caution.

Event: Rate Decision | Date: September 17, 2025

Policy Action: 25bps CUT

Context: First rate cut in the current easing cycle, lowering the federal funds rate target to 4 to 4-1/4 percent (17).

Speaker: Jerome H. Powell | Date: September 17, 2025 | Source: Press Conf Transcript

Labour Market: ✓ "job gains have slowed, and downside risks to employment have risen," depicting a "less dynamic and somewhat softer labor market" (18).
Inflation Concern: ✓ "inflation has risen recently and remains somewhat elevated," with "risks to inflation are tilted to the upside" (18).
Policy Bias: easing - "decided to lower our policy interest rate by 1/4 percentage point" as risks moved "toward a more neutral policy stance" (18).
Risk Asymmetry: employment - "balance of risks has shifted" towards "downside risk clearly in the labor market" (18).
Internal Divergence: ✓ Notes "wide dispersion of views" among participants and no "widespread support for a 50 basis point cut" (18).

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — First rate cut signals a shift to easing, driven by rising employment risks, despite elevated inflation concerns.

Speaker: FOMC Participants | Date: September 17, 2025 | Source: SEP

Labour Market: ✓ Median unemployment rate for 2025 (4.5%) and 2026 (4.4%) is unchanged/slightly lower than June, but 13 participants weigh risks to unemployment to the downside (19).
Inflation Concern: ✓ Median PCE inflation for 2026 (2.6%) is higher than June projection (2.4%), and 12 participants weigh risks to inflation to the upside (19).
Policy Bias: easing - Median federal funds rate projections are lower for 2025 (3.6%) and 2026 (3.4%) compared to June (19).
Risk Asymmetry: employment - 13 participants weigh GDP risks to the downside, and 13 weigh unemployment risks to the downside (19).
Internal Divergence: ✓ FFR projections for 2025-2028 show a wide range (e.g., 2025: 2.13-4.62%), indicating significant internal disagreement (19).

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — Projections reflect a lower rate path and heightened concern for employment risks, indicating a clear easing bias.

Speaker: FOMC | Date: September 17, 2025 | Source: FOMC Statement

Labour Market: ✓ "Job gains have slowed, and the unemployment rate has edged up but remains low. [...] downside risks to employment have risen" (17).
Inflation Concern: ✓ "Inflation has moved up and remains somewhat elevated" (17).
Policy Bias: easing - "decided to lower the target range for the federal funds rate by 1/4 percentage point" (17).
Risk Asymmetry: employment - "judges that downside risks to employment have risen" (17).
Internal Divergence: ✓ Stephen I. Miran voted against, preferring to lower the target range by 1/2 percentage point (20).

Behavioural Feasibility: ACTION-BIASED

TONE: DOVISH — Rate cut indicates an easing shift, explicitly citing rising downside risks to employment, with a notable dovish dissent.

Speaker: FOMC | Date: September 5, 2025 | Source: Press Release (Schedule)

Labour Market: N/A - Administrative announcement.
Inflation Concern: N/A - Administrative announcement.
Policy Bias: N/A - No policy stance indicated.
Risk Asymmetry: N/A - No risks discussed.
Internal Divergence: no - Schedule announcement.

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Standard administrative release with no policy implications.

Speaker: FOMC | Date: August 22, 2025 | Source: Statement

Labour Market: ✓ Reaffirms commitment to "maximum employment" and recognizes it "is not directly measurable and changes over time" (21).
Inflation Concern: ✗ Reaffirms "inflation at the rate of 2 percent" as consistent with mandate (21).
Policy Bias: data-dependent - Emphasizes "balanced approach" when employment and inflation objectives are in tension (21).
Risk Asymmetry: balanced - Dual mandate implies equal weight to employment and price stability (21).
Internal Divergence: no - This is a strategy statement, not a meeting record.

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Reaffirms dual mandate and balanced approach, providing a stable long-term policy framework.

Event: Rate Decision | Date: July 30, 2025

Policy Action: HOLD

Context: Federal funds rate maintained at 4-1/4 to 4-1/2 percent, following a period of solid labor market and elevated inflation, but with internal dissent for a cut (22).

Speaker: FOMC | Date: July 29-30, 2025 | Source: Minutes

Labour Market: ✓ "unemployment rate remained low... labor market conditions remained solid," but "indicators that could suggest a softening in labor demand" were noted (23).
Inflation Concern: ✓ "overall inflation remained somewhat elevated," with "tariff effects... becoming more apparent" and "upside risk to inflation" (23).
Policy Bias: data-dependent - "almost all members agreed to maintain the target range," but "a couple... preferred to lower the target range" (23).
Risk Asymmetry: balanced - "upside risk to inflation and the downside risk to employment remained elevated" (23).
Internal Divergence: ✓ Two members preferred a 25bps cut (23).

Behavioural Feasibility: HOLD-BIASED

TONE: NEUTRAL — Committee held rates, but significant discussion around softening labor and elevated inflation, with a dovish dissent.