Twittereconomics or why the Fed does not like Elon Musk

Twittereconomics or why the Fed does not like Elon MuskThe Twitter site, now known as X.com, is now very useful to economists and analysts: the influence of social networks is becoming an indispensable element of fundamental analysis. Articles regularly appear in the press on how to decipher the economic signals of social media sites ranging from Facebook to Reddit. But Musk's company requires special attention.Elon Musk has never been a fan of the Fed's policies, for example, over the past year, the new owner of Twitter has criticized the regulator more than 10 times for raising interest rates. Nevertheless, Fed analysts consider Twitter posts to be a reliable barometer of fundamental trends. No social network can match Twitter in terms of information volume: back in 2013, its users created more than 5,700 posts per second.Sentiment, which can be gauged from tweets, is a good predictor of short-term fluctuations in both stock prices and bond yields. For example, Treasury bond yields are more strongly correlated with tweets than with sentiment indicators from the Fed's own official communications.The Twitter index is also closely correlated with corporate bond spreads  government statistics are usually published late, and tweets appear immediately. Twitter, for example, signalled a decline in employment at the height of the pandemic in 2020 ten days early.Now Musk is trying to break the economic balance in the company by giving privileges to users who pay $8 a month for verification. Paid tweets may start to crowd out more meaningful posts from users who would rather remain anonymous. After some time, a social network, for which payment is more important than trust, will no longer be effective as an economic indicator.It turns out that Twitter's profit will turn into information losses for Fed economists. So there are fewer and fewer arguments for friendship.Profits to yall!#ForexChief #fed #forexnews #StopLoss #stocks #market #profit #Traders #twitter #ElonMusk