There was a lot of confusion over the Federal Reserve’s rate decision and outlook Wednesday afternoon. Yes, the central bank made the rate cut the market wanted and signaled more were coming. But Chair Jerome Powell characterized it as just a “risk management” cut, pouring cold water on some of the enthusiasm. The Fed’s so-called dot plot of rate forecasts only added to the confusion, showing a scatter plot of views for the new year. The stock market appeared to like the central bank’s actions at first, then not like them, then endorse them again somewhat before the close. And Thursday’s futures’ gains show stock investors are ultimately liking what the Fed gave them a day ago. AI may explain some of that enthusiasm from traders this morning. JPMorgan used AI-based natural language processing to analyze the Fed statement and Powell’s prepared marks. The machines told JPMorgan that this was the most dovish the Fed has been since 2021, which they blasted out to clients overnight. “Our NLP model read both the statement and Powell’s prepared remarks as significantly more dovish than the last meeting, and the most dovish since 2021,” said Jay Barry, fixed income strategist at the bank, wrote to clients. The bond market appeared to agree with the AI assessment with the 10-year yield topping 4.11% in early trading Thursday. CNBC lead markets writer Sarah Min didn’t need AI. She messaged me at 3:15 p.m. ET, after polling traders and investors trying to make sense of the Federal Reserve decision, with a simple comment: “Aren’t these all … dovish signals overall?” She then highlighted that the Fed now sees two more rate cuts after Wednesday’s, up from just one in their previous summary of economic projections, and pointed out the concerns the central bank raised about the labor market. Futures contracts tied to the S & P 500 and Nasdaq-100 pointed to solid gains at Thursday’s open. The Technology Select Sector SPDR fund (XLK) climbed 1.4%, led by a 2% gain in Nvidia. Intel also surged 30% after Nvidia announced a $5 billion investment in the company. To be sure, the outlook for easier monetary policy could be in jeopardy if new data shows lower rates may not be warranted. But for now, stocks will interpret this latest Fed outlook as a favorable one, even after a choppy session Wednesday. “In aggregate, we believe this reads dovishly as the majority of the Committee is willing to ease into an economy returning to trend with core inflation likely to run above target for the sixth consecutive year,” JPMorgan’s Barry said. (Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here .)
Fed, Powell turned most ‘dovish’ since 2021: JPMorgan AI analysis