Mind the Shift: Decoding Monetary Policy Stance from FOMC Statements with Large Language Models
About
Federal Open Market Committee (FOMC) statements are a major source of monetary-policy information, and even subtle changes in their wording can move global financial markets. A central task is therefore to measure the hawkish--dovish stance conveyed in these texts. Existing approaches typically treat stance detection as a standard classification problem, labeling each statement in isolation. However, the interpretation of monetary-policy communication is inherently relative: market reactions depend not only on the tone of a statement, but also on how that tone shifts across meetings. We introduce Delta-Consistent Scoring (DCS), an annotation-free framework that maps frozen large language model (LLM) representations to continuous stance scores by jointly modeling absolute stance and relative inter-meeting shifts. Rather than relying on manual hawkish--dovish labels, DCS uses consecutive meetings as a source of self-supervision. It learns an absolute stance score for each statement and a relative shift score between consecutive statements. A delta-consistency objective encourages changes in absolute scores to align with the relative shifts. This allows DCS to recover a temporally coherent stance trajectory without manual labels. Across four LLM backbones, DCS consistently outperforms supervised probes and LLM-as-judge baselines, achieving up to 71.1% accuracy on sentence-level hawkish--dovish classification. The resulting meeting-level scores are also economically meaningful: they correlate strongly with inflation indicators and are significantly associated with Treasury yield movements. Overall, the results suggest that LLM representations encode monetary-policy signals that can be recovered through relative temporal structure.
Related benchmarks
| Task | Dataset | Result | Rank | |
|---|---|---|---|---|
| Sentiment Analysis | FOMC | Accuracy71.08 | 44 | |
| Meeting-level stance correlation | PPI YoY (meeting-level) | Pearson Correlation Coefficient0.4799 | 18 | |
| Meeting-level stance correlation | CPI YoY (meeting-level) | Pearson Correlation0.5021 | 18 | |
| Regression of Treasury yield levels | FOMC Stance Scores 2Y Treasury Yield | Beta Coefficient2.121 | 6 | |
| Regression of Treasury yield levels | FOMC Stance Scores 10Y Treasury Yield | Beta0.796 | 6 | |
| Regression of Treasury yield levels | FOMC Stance Scores 20Y Treasury Yield | Beta0.852 | 6 | |
| Stance Scoring Correlation | FOMC Statements CPI 2008–2015 (P2) | Pearson Correlation (r)0.108 | 4 | |
| Stance Scoring Correlation | FOMC Statements CPI P3 2015–2020 | Pearson Correlation Coefficient (r)0.339 | 4 | |
| Stance Scoring Correlation | FOMC Statements PPI P2 2008–2015 | Pearson Correlation (r)0.228 | 4 | |
| Stance Scoring Correlation | FOMC Statements PPI P4 2020–2025 | Pearson Correlation (r)0.686 | 4 |