'Volfefe Index' Launched by JPMorgan Chase

Money Time |

A special index, known as Volfefe has been created by JPMorgan Chase and looks at the effect on interest rates and other indicators when President Donald Trump publishes another Tweet. 

‘Volfefe’ is a combination of ‘volatility’ and President Trumps own word covfefe” which he tweeted in 2017 causing uproar on the Twitter sphere. The Tweet, on 31 May 2017, where the President wrote "Despite the constant negative press covfefe." was later deleted but by then it had already gone viral.

Analysts from JPMorgan Chase have noted that since he took office President Trump has tweeted around 10 times every day. Since January 2017 this has amounted to around 14,000 individual tweets. 

In their statement, the firm said that President Trump’s tweets had become more concerned with monetary policy, the money markets and trade policy and the results of their analysis show that each time he tweets there is a move in the US markets.

MoneyTime Keywords

Certain keywords have had bigger effects than other, in particular, tariffs, trade, dollar, billions and China. These would affect the US rates markets despite being less likely to receive likes or be retweeted. The index itself is designed to measure how these tweets have increased volatility within the US rates markets.

Although the Volfefe Index has limits in terms of its ability to score the tweets it has been helpful in machine learning meaning that the bank can now use a classifier to assess how much a particular tweet is likely to effect a market.

It has been noted that some of the price changes in certain stocks and products have been directly related to Trump’s tweets.

Although the “covfefe” tweet was deleted almost immediately it is still used as an Internet meme. In July, even the White House showed that it has embraced the trend by presenting the tweet as a giant screenshot at its own social media summit.

Also in July the Federal Reserve took the step of lowering the benchmark interest rate for the first time in 10 years. The reason? Donald Trump’s trade policies and the uncertainty surrounding them.