ECB communications contain information that improves the forecasting of future monetary policy decisions

Infografik of April 16, 2025

The picture shows an infographic of the DIW Weekly Report 16-17/2025 with the title: ECB Communication Contains Information that Improves Forecasting of Future Monetary Policy Decisions Description: The image presents an infographic illustrating the analysis of ECB statements by the AI model RoBERTa to predict future monetary policy decisions. Visual Elements: Building: On the left, a stylized building with stars represents the European Central Bank (ECB). Robot: A robot named "RoBERTa" stands in the foreground, symbolizing the AI model conducting the analysis. Documents: Several documents are depicted under the robot, representing ECB statements. Chart: On the right, a chart shows key interest rate decisions from July 2023 to January 2025. The y-axis displays different key interest rate decisions: rate hike, pause, and cut. The x-axis shows the timeline from July 2023 to January 2025. Symbols indicate actual decisions: Yellow stars for decisions. Green stars for correct predictions. Red stars for incorrect predictions. Additional Information: The source of the data is noted as the authors' own calculations at the bottom of the image. The image illustrates how the AI model RoBERTa analyzes ECB communication to make predictions about future monetary policy actions. This description provides an overview of the use of an AI model to analyze ECB statements for predicting monetary policy decisions.

© DIW Berlin

Topics: Financial markets , Monetary policy

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