What it means
Four times a year it also publishes projections, including the dot plot of expected rates.
In practice
The US dollar and US interest rates sit behind almost every market, so Fed decision days affect stocks, bonds, currencies, gold and crypto together. Traders study the statement, the projections and the press conference for clues about the path of rates.
Markets are often quiet in the hours before the announcement, then move sharply at 2:00 pm and again during the press conference.
What to watch for
The first move on the announcement is frequently reversed once the press conference begins. Trading the release itself means wide spreads and whipsaws; many traders wait until the next day.
Related terms
3 terms- Interest rateThe price of money set by central banks; higher rates usually lift the currency and weigh on stocks and gold.
- Central bankThe institution that sets a country's interest rates: the Fed, ECB, Bank of England, Bank of Japan and others.
- CPIThe US inflation report, monthly at 8:30 am New York time; core CPI leaves out food and energy.