Deutsche Bank: Fed Communication Turns More Cautious and Slightly More Hawkish - FJElite

Using an LLM-based scoring system that ranks Fed communications from 0 as most dovish to 10 as most hawkish, the latest read on speeches ahead of the April FOMC blackout shows a further shift in a hawkish direction. Ongoing volatility in the Middle East and the uncertainty it has created around energy prices appear to have pushed officials toward a more cautious near-term policy stance, with greater focus on the risks from a sustained oil shock.

That shift shows up in the scores. The average for 2026 voters rose to 4.9 in April from 4.5 in March, while the average for all officials increased to 5.4, the most hawkish level since Liberation Day. The broader takeaway is that Fed communication has become more cautious and somewhat more hawkish, reinforcing the current wait-and-see approach to policy.