FAQ
Clear answers to common questions about the data, methodology, and the app experience.
Top questions
💡 What is “FOMC sentiment” here?
A sentiment index derived from Federal Open Market Committee (FOMC) statements.
Higher values signal optimism and confidence in economic growth, while lower values indicate caution or
concern about economic conditions such as unemployment or weak demand.
📈 What is “S&P 500 Fwd 12m”?
The forward 12-month total return proxy based on closing prices:
Fwd12m = Close[t+12] / Close[t] − 1.
Recent months can be null because the future price isn’t known yet.
🤔 Do higher sentiment readings imply higher future returns?
Not necessarily. Sentiment is one input; market outcomes depend on growth, inflation, liquidity, valuations,
and unexpected events. Treat this as context, not a forecast.
More questions
🔀 Why don’t the two lines move together?
Policy tone may lag data or reflect risk assessments that markets price differently.
Regime shifts and shocks can dominate both series at times.
🗓️ How often is the data updated?
Monthly, once new FOMC materials are available and the month’s S&P 500 close is finalized.
ℹ️ Why do we use 12-month forward returns instead of current or past returns?
- We focus on how the Federal Reserve’s tone relates to what happens after each policy communication, not what was happening at the same time. Using a 12-month forward return shows how the market performed in the year following each FOMC statement. This helps us evaluate whether optimistic or cautious language from policymakers tends to precede stronger or weaker market outcomes, rather than simply reflecting the conditions that existed when the statement was released.