DID KEVIN WARSH “DECEIVE” TRADING ALGORITHMS?
In the first few minutes of his speech at Jackson Hole yesterday, Fed Chairman Kevin Warsh used the word “hike” several times, but he was simply talking about hiking. More notably, he ended a sentence with the word “hike,” then began the next sentence with the phrase “interest rates,” meaning interest rates.
Some people suspect that algorithms that read speeches by keywords may have stitched these two phrases together as “hike interest-rate,” meaning an interest-rate increase, even though Kevin Warsh did not actually say that. This could have triggered a wave of automated trades, contributing to sharp market volatility within just a few minutes.
However, there is no evidence confirming that the algorithms were truly fooled. A more plausible underlying cause is that Kevin Warsh’s subsequent message was quite hawkish.
$BTC
$FF
$INJ
In the first few minutes of his speech at Jackson Hole yesterday, Fed Chairman Kevin Warsh used the word “hike” several times, but he was simply talking about hiking. More notably, he ended a sentence with the word “hike,” then began the next sentence with the phrase “interest rates,” meaning interest rates.
Some people suspect that algorithms that read speeches by keywords may have stitched these two phrases together as “hike interest-rate,” meaning an interest-rate increase, even though Kevin Warsh did not actually say that. This could have triggered a wave of automated trades, contributing to sharp market volatility within just a few minutes.
However, there is no evidence confirming that the algorithms were truly fooled. A more plausible underlying cause is that Kevin Warsh’s subsequent message was quite hawkish.
$BTC
$FF
$INJ