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Mind the Shift: Decoding Monetary Policy Stance from FOMC Statements with Large Language Models

arXiv 2603.14313 ↗First posted 15 Mar 2026cs.CLcited by 0

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Abstract (arXiv)

Federal Open Market Committee (FOMC) statements are a major source of monetary-policy information, and even subtle changes in their wording can move global financial markets. A central task is therefore to measure the hawkish--dovish stance conveyed in these texts. Existing approaches typically treat stance detection as a standard classification problem, labeling each statement in isolation. However, the interpretation of monetary-policy communication is inherently relative: market reactions depend not only on the tone of a statement, but also on how that tone shifts across meetings. We introduce Delta-Consistent Scoring (DCS), an annotation-free framework that maps frozen large language model (LLM) representations to continuous stance scores by jointly modeling absolute stance and relative inter-meeting shifts. Rather than relying on manual hawkish--dovish labels, DCS uses consecutive meetings as a source of self-supervision. It learns an absolute stance score for each statement and a relative shift score between consecutive statements. A delta-consistency objective encourages changes in absolute scores to align with the relative shifts. This allows DCS to recover a temporally coherent stance trajectory without manual labels. Across four LLM backbones, DCS consistently outperforms supervised probes and LLM-as-judge baselines, achieving up to 71.1% accuracy on sentence-level hawkish--dovish classification. The resulting meeting-level scores are also economically meaningful: they correlate strongly with inflation indicators and are significantly associated with Treasury yield movements. Overall, the results suggest that LLM representations encode monetary-policy signals that can be recovered through relative temporal structure.

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References · 7

  1. 2016Understanding intermediate layers using linear classifier probescited by 1,353
  2. 2022Discovering Latent Knowledge in Language Models Without Supervisioncited by 767
  3. 2023Trillion Dollar Words: A New Financial Dataset, Task & Market Analysiscited by 75
  4. 2025Steer LLM Latents for Hallucination Detectioncited by 50
  5. 2023Unsupervised Contrast-Consistent Ranking with Language Modelscited by 13
  6. 2024GPT Deciphering Fedspeak: Quantifying Dissent Among Hawks and Dovescited by 5
  7. 2025Op-Fed: Opinion, Stance, and Monetary Policy Annotations on FOMC Transcripts Using Active Learningcited by 1

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