Forget ‘Fake News.’ For Markets, It’s Never Been More Real
- News sentiment presages U.S. economic activity: Fed paper
- Outperforms University of Michigan and Conference board data
Fed Economist Using News, Social Media to Track Economy
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Buy the news and sell the soft data.
That’s the conclusion drawn from a paper by the Federal Reserve Bank of San Francisco, which suggests that financial news holds predictive power when it comes to a slew of economic data. Stories about the U.S. economy can even outperform more traditional measures such as surveys of consumer sentiment when it comes to gauging ‘‘animal spirits’’ and forecasting future activity, it found.