Relevance: prelims: Current Affairs
American investment firm JPMorgan has created ‘Volfefe’ index to track the impact of Donald Trump’s tweets on US interest rates and stock market.
Key highlights
- JPMorgan’s “Volfefe Index,” named after Trump’s mysterious covfefe tweet from May 2017, suggests that the President’s tweets have increasingly moved the US rates markets immediately after they were published.
- Analysts also found that the number of market-moving tweets from Trump’s handle rose in the past month, with those including words such as ‘China,’ ‘billion,’ ‘products,’ ‘democrats,’ and ‘great,’ most likely to affect prices.
- JPMorgan isn’t alone in attempting to calculate the impact of the president’s Twitter activity on markets. Analysts at Bank of America Merrill Lynch published a note last week concluding that days where President Trump tweets relatively frequently tend to see negative returns of 9 basis points on average.