MCLEAN, Va., April 21, 2017 /PRNewswire/ -- Between the Lines Indicators, Inc. (BTLI) has developed innovative methods of quantifying uncertainty in the narrative that corporations and the Federal Reserve post in the public domain. Using advanced text analytic methods, two quarterly uncertainty indices have been developed that are useful indicators of economic risk and subsequently provide predictive capability in future market conditions: a Federal Reserve Uncertainty Index (FED UI) and an S&P 500 Corporate Uncertainty Index (S&P500 UI).
Uncertainty in economic conditions as expressed by narrative of the Federal Reserve decreased in the first quarter of 2017. Specifically, the Federal Reserve Uncertainty Index (FED UI) for the 1st Quarter decreased by 2.95% relative to the previous quarter. First quarter narrative from Federal Reserve statements noted solid growth prospects and a strengthening job market (as realized in subsequent interest rates validated). Overall, statements indicated growing optimism and reduced uncertainty with regards to future business conditions.
S&P 500 Corporate Uncertainty Index (S&P500 UI) remained unchanged relative to the previous quarter reflecting confidence in current business conditions as well as some level of uncertainty with the change of administration and how future federal policies could impact specific sectors of the economy. The unchanged S&P Uncertainty Index (S&P 500 UI) halts a three quarter trend of lower uncertainty index values through most of 2016.
Uncertainty is a broadly recognized influence on economic activity. The relationship between uncertainty and economic welfare has been well documented in economic literature and recent research has demonstrated a strong correlation between specific investment classes and higher levels of uncertainty. Increased uncertainty is known to cause consumers and firms to pare back spending and will drive capital towards less risky investments (i.e., gold, US Treasury Bonds).
Please visit the BTLI website at btl-indicators.com for more detailed information.
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SOURCE Between the Lines Indicators, Inc.