1. Introduction: The F‑Tone Index measures the Federal Reserve's policy tone as expressed in official speeches, FOMC statements and minutes, plus regional Fed speeches, testimony, and Fed blog posts; it includes both rate guidance and balance sheet. A companion Market Expectation score is produced by a separate service using Treasury yields and the US Dollar Index. On the back of the FTN tile, the index also shows the current policy rates directly controlled by the Fed.
2. Radical transparency: The FTN Index is built on one core principle: every score is traceable to its source, every number is verifiable. No black boxes. No hidden logic. Just open data, openly presented.
3. Score: The score uses a scale from 0 = extremely dovish (signalling rate cuts / easing) to 100 = extremely hawkish (signalling rate hikes / tightening). It reflects a combined assessment of two factors:
– Imminence: how soon a change to the federal funds rate is expected.
– Sharpness: how large or decisive that change appears.
These factors are weighed equally. The AI analyses the text for language about inflation, employment, growth, and policy guidance, then returns a single number capturing both the urgency and magnitude of potential rate actions.
If no new Fed communications are available on a given day, the index re‑evaluates the most recent documents, and the source count reflects the number of documents analysed.
4. Dual display: The headline shows live → 7d avg:
– Live score – the immediate average of today's document scores. It reacts instantly to new Fed language.
– 7d avg – a rolling average of the last 7 days (6 past days + today so far), designed to filter out noise and reveal the trend.
The ▲ / ▼ / — indicator reflects the daily change in the 7d avg, comparing today's 7‑day average (6 past days + today so far) with yesterday's 7‑day average.
If the live score moves 5 points or more in the opposite direction of the smoothed score's movement (i.e., the 7d avg trend), a persistent alert (⚠️) appears next to the live score for up to 24 hours — as an early warning of a potential trend change.
Traders and short‑term decision‑makers may find the raw score more useful; longer‑term investors and analysts may prefer the smoothed trend.
5. Qualitative label: The “Hawkish” / “Dovish” label shows in which segment of the 0–100 range the 7d avg is anchored:
– 0–20: Extremely Dovish
– 20–40: Dovish
– 40–60: Neutral
– 60–80: Hawkish
– 80–100: Extremely Hawkish
The label is a quick visual and mnemonic reference for the score's segment. It does not imply a movement or a trend direction.
6. Confidence: HIGH, MEDIUM, or LOW reflects the breadth of sources analysed and the total text volume. HIGH means ≥4 sources and >8,000 characters of Fed text were processed; MEDIUM means ≥2 sources and >3,000 characters; LOW means fewer sources or less text. It indicates how much information the day’s reading is based on, not the accuracy of the AI score.
7. Data availability: When a fresh index computation cannot be retrieved for any reason, the dashboard displays the most recent successfully computed reading, marked as ‘last reading’.
8. Market expectation: Below the FTN data, a separate section shows what Treasury markets and the US Dollar Index are collectively pricing about the Fed’s next moves. It uses the 2‑year Treasury yield (via FRED), the 2y/10y spread (FRED), and the US Dollar Index DXY (via Yahoo Finance). It is not part of the document‑driven FTN index – it’s a companion indicator for comparison.
9. Fed policy rates (flip‑card): The flip‑card on the FTN tile shows the three key rates the Federal Reserve directly controls: the Fed Funds target range, the Interest on Reserve Balances (IORB) rate, and the Overnight Reverse Repo (ON RRP) rate. These are displayed so you can compare the Fed's actual policy stance with the sentiment expressed in its communications. The data is sourced directly from the Federal Reserve via FRED.
10. Inclusive design: The colour pair used for the live and smoothed scores — a warm purple and a cool blue — is carefully chosen to be clearly distinguishable for users with the most common form of colour vision deficiency (red‑green).