WASHINGTON — In a landmark study that economists say finally explains the past six years, the Federal Reserve released a report Thursday concluding that "just vibes" now account for 47% of all movement in U.S. financial markets, making the general feeling that something is happening the single largest driver of asset prices in the country, ahead of corporate earnings, interest rates and whatever the economy is doing.
The 212-page report, titled Decomposing Price Action: Fundamentals, Policy, and the Thing Where Everyone Just Kind of Feels It, was produced by the central bank's Office of Sentiment Accounting, a unit formed after staff economists noticed that their models could explain about half of what markets did and that the other half "was basically a mood."
"For decades we called it the residual and assumed it was noise," said Dr. Marguerite Fenwick-Oyelaran, the office's director, standing beside a pie chart in which a single gold slice took up nearly half of the circle. "It isn't noise. Noise has no direction. Vibes have a direction, and the direction is whatever a guy on a podcast said most recently in a confident voice."
According to the report, interest-rate expectations drive 14% of market movement, posts by elected officials 13%, corporate earnings 11%, economic data 8% and anything with "AI" in the name 7%. Earnings and data together, which the report groups as "fundamentals," came to 19%, a share that has fallen every quarter since the office began tracking it and that one staff economist described as "hospice-adjacent."
The authors held up last week as a case study. Stocks rallied after the Nov. 3 midterm elections, then the S&P 500 fell 4.4% on Nov. 5, its worst day since April 2025, as worries about financing for artificial-intelligence data centers came back. The VIX, Wall Street's so-called fear gauge, jumped nearly 70% in a single session to close at 28.18. The jobs report that Friday came in stronger than expected. On Monday, Nov. 9, U.S. stocks added about $1 trillion in market value in the opening stretch of trading as dip buyers moved back into technology shares.
"Nothing about the actual economy changed between Thursday and Monday," Fenwick-Oyelaran said. "We checked. We called all twelve districts. Two of them said it was giving recovery."
Analysts noted at the time that it was hard to tell genuine doubts about AI apart from forced selling by leveraged funds and automated strategies. The Fed's report settles the question by classifying both as vibes.
The Vibe Attribution Engine™
Choose a market move. The Fed's model will break it down into its true causes, to the nearest percent.
Past vibes are not a reliable indicator of future vibes. They are, however, 47% of them. Attribution results may vary depending on how the model is feeling.
The findings carry obvious implications for monetary policy. At its Oct. 28 meeting, the Fed held its benchmark rate in a range of 3.75% to 4.00% by a 10-2 vote, with two officials preferring a hike, a month after raising rates for the first time in three years. With the next meeting scheduled for Dec. 8 and 9, the report recommends that the committee "consider whether the decision matters as much as the tone of voice in which it is read aloud."
An internal memo attached to the report goes further, proposing that "maximum vibes" be added as a third mandate alongside stable prices and maximum employment. "Rates are a blunt instrument," said a senior staffer who asked not to be named because she was "not in the right headspace." "A well-timed pause during a press conference can move the 10-year more than 25 basis points. We have the data. The data is mostly pauses."
The Fed's Beige Book, which gathers anecdotal reports from the twelve regional banks and is next due Nov. 25, will add a vibes paragraph for each district. The October edition reported growth in nine of twelve districts. A draft of the new section reviewed by HuckFinn describes the Minneapolis district as "immaculate," Dallas as "lowkey bullish" and San Francisco as "off, but in a way that could be a buying opportunity."
Consumers appear to agree. The University of Michigan's preliminary consumer sentiment reading for November came in at 51.0, up from 48.0 in October and well above forecasts, six months after the index hit a record low of 44.8 in May. Year-ahead inflation expectations eased to 4.3% from 4.7%. "Americans feel about 6% less bad, and nobody can tell us why," Fenwick-Oyelaran said. "That's how we know it's working."
Be The FOMC (Of Vibes)
Adjust the inputs the committee actually uses. Then read the statement aloud and watch the futures react to your voice.
The vibe funds rate is not the federal funds rate. It is, according to the report, about half of it.
Wall Street has moved quickly. Halvorsen Pike Capital on Wednesday launched an exchange-traded fund under the ticker VIBE that holds whatever its portfolio managers "are feeling," rebalanced each morning after a group text. The fund charges 0.47% a year. "Index funds track the market," said a spokesman. "We track the market's mood about the market, which the Fed now says is the bigger half."
Retail traders said the report confirmed what they had suspected. "I buy when it feels like a buying day," said Dale Prusik, 41, of Columbus, Ohio, who keeps his brokerage app on the second screen of his phone "so it doesn't know I'm looking." "Now the Federal Reserve says I'm 47% of an institution."
A small group of economists criticized the method, noting that the office measured vibes by asking 300 traders to rate their week on a scale from "cooked" to "so back." Fenwick-Oyelaran was unmoved. "Every measure of the economy is a survey of somebody's feelings," she said. "Consumer sentiment is a survey. The Beige Book is a survey. We just stopped pretending the feelings were about numbers."
The office has applied its method to itself. A footnote on page 198 says its $4.7 million budget request for next year was reached after staff "sat with the number for a while," and the headline 47% figure carries a margin of error of plus or minus "how you're feeling." Asked whether the Fed could do anything to bring vibes back below half, Fenwick-Oyelaran paused for several seconds before answering. The 10-year Treasury yield fell 3 basis points.
At press time, stock futures had risen 0.8% on news that the report existed, a move the Office of Sentiment Accounting attributed, after a brief review, entirely to vibes.
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