Investment banking giant JPMorgan has reportedly unveiled an artificial intelligence (AI) tool based on ChatGPT to analyze statements and speeches from the US Federal Reserve (FED) in order to detect possible trading signals.
JPMorgan uses ChatGPT to create an AI model
If you regularly follow the speeches of the American Federal Reserve (FED), it will not have escaped your notice that they induce high volatility in risky markets (more particularly equities and cryptocurrencies). Based on this observation, JPMorgan Chase reportedly designed an artificial intelligence (AI) model making it possible to analyze these speeches and to detect trading signals.
This information was revealed by our colleagues at Bloomberg. According to their sources, Wall Street investment bank operated ChatGPT to analyze 25 years of discourse, estimate tone and trend, and assess impact on risky assets. So, economists were able to build a correlation model usable by traders.
To put it very simply, this model will give a score on a scale ranging from from “Hawkish” (warmonger) to “Dovish” (pacifist). This is what JPMorgan dubbed the “Hawk-Dove Score”. Note that Hawkish is a monetary policy term referring to raising interest rates, while Dovish favors loose and expansionary monetary policy.
“Preliminary applications are encouraging”, said Joseph Lupton, an economist at JPMorgan. For now, the model has been shared with the Bank of England and the European Central Bank and will be open to 30 other global central banks. It would seem that only the equity market is concerned, and that Bitcoin (BTC) and other cryptocurrencies are not included in the model.
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JPMorgan open to innovation?
Investment bank JPMorgan has never shied away from innovation. On the contrary, new technologies have always been implemented in their activities and Artificial Intelligence is no exception. Besides, CEO Jamie Dimon called it a ” revolutionary ” several times in the past.
Moreover, in an annual letter sent to shareholders at the beginning of the month, Jamie Dimon revealed the bank is working on more than 300 AI use cases for the improvement of its products.
Nevertheless, although JPMorgan is inclined to integrate Artificial Intelligence in its activities for its own profit, she is not very enthusiastic about letting her employees benefit from it for their own personal uses.
In February, the company has banned its staff from using ChatGPT, according to some information. However, no particular incident prompted the decision to block employees from accessing OpenAI’s chatbot.
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