JPMorgan's New 'Volfefe Index' For Trump Tweets: What You Should Know

How much do Trump tweets swing the market? Check

Bloomberg cited Citigroup quantitative foreign-exchange strategist Sukrita Chatterji's statistic that about "10% of the president's tweets since his November 2016 election pertain to subjects of importance to US markets".

American investment firm JPMorgan has come out with an index to gauge the impact of Donald Trump's tweets on usa interest rates.

Trump has produced more than 10,000 tweets since taking office, at a pace that has accelerated in recent months to over a dozen non-retweets a day on his personal account.

"The subject of these tweets has increasingly turned toward market-moving topics, most prominently trade and monetary policy", the analysts said, according to CNN.

He denigrates the Fed chairman, threatens the Chinese with new tariffs, demands US companies do as he says - and the markets react. It turns out that it's not specifically the president's tweets that cause market volatility, but the uncertainty forged by the administration's overall economic policy.

The report found market-moving tweets are quite distinct, on average, from the broader population of presidential tweets by several important metrics.

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Since the beginning of 2016, Trump has sent out around 10 tweets per day with 10,000 tweets since his inauguration in 2017, the analysts found.

Trump's tweets, which have in recent months often focused on market-sensitive topics such as trade and monetary policy, have increasingly moved USA rates markets, analyst Munier Salem said in a note on Friday. "Eastern Time is the most likely window within which a new remark will hit the tape, a time fortuitously coterminous with some of the best intra-day liquidity in United States rates markets", the report elaborated.

The index can explain a measurable fraction of moves in the market's forecast of likely movement in rates, particularly the shorter duration 2-year and 5-year rates, the analysts said.

In a note, JPMorgan analysts say Trump's tweets "have played a statistically significant role in elevating implied volatility".

August Trump tweets included the shock announcement on August 1 that the USA would impose new tariffs on $300 billion of Chinese goods, as well as a series of escalating attacks on Federal Reserve Chair Jerome Powell.

More tweeting by Mr. Trump means more opportunities for tweets that move markets, although only some of them actually do. The S&P 500 also remains well above where it was before Trump's 2016 election, up almost 40 per cent.

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