What it measures
At each meeting the Federal Open Market Committee decides the target range for the federal funds rate, the rate at which banks lend reserves to each other overnight. The calendar shows the range, for example 3.75–4.00%. Changes ripple out to loan, mortgage and bond rates.
Who publishes it and when
The Committee holds eight scheduled meetings a year. The policy statement is released at 14:00 New York time on the last day of the meeting, followed by a press conference with the Chair. The minutes come out about three weeks later. Four meetings a year also bring updated economic projections from the members.
How it is put together
The FOMC has twelve voting members: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the other eleven Reserve Bank presidents, who rotate each year. The other presidents attend and take part in the discussion without voting.
The Fed's goals are maximum employment and stable prices, with inflation of 2% measured by the PCE price index.
What traders watch
Markets usually expect the decision itself, because futures prices show the probabilities in advance. Traders watch the wording of the statement, how many members dissented, the projections of future rates when they are published, and the Chair's answers at the press conference.
How markets have usually reacted
A rise, or a more hawkish tone than expected, has often lifted the dollar and U.S. yields and weighed on gold and stock indices. A cut, or a softer tone, has often done the opposite. A decision that matches expectations can still move prices sharply if the guidance changes.
Common mistakes
- Reacting to the rate alone. When the decision itself is expected, the statement, the vote and the press conference usually decide the move.
- Trading the first seconds: spreads widen and prices can jump in both directions before settling.
- Forgetting the press conference: it starts after the statement and can move the market a second time.
How a higher or lower figure is usually read
A rate rise is usually read as supportive for the U.S. dollar and a cut as negative. When no change is expected, the tone of the statement matters most. Not a signal.
Release history
| Date | Period | Actual | Previous |
|---|---|---|---|
| — | 3.75–4.00% | 3.75–4.00% |
Related news
- FOMC Meeting Minutes
- US Core PCE Price Index
- US Consumer Price Index (CPI)
- US Non-Farm Payrolls
- Economic calendar: every release this week in your time zone
- Lot size calculator: keep your risk the same around news
- How to use an economic calendar: what happens around a release, and how to plan for it
Trading involves a high risk of loss. This page is information and education, not advice or a signal to trade. See the Risk Disclaimer.
Official source
Calendar data: www.federalreserve.gov
Published by Federal Reserve, Federal Open Market Committee (FOMC): www.federalreserve.gov