FOMC

FOMC meetings are the highest-impact scheduled macro events in the U.S. market calendar. The Fed's rate decision alone can move every asset class simultaneously: equities, bonds, the dollar, gold, oil, crypto. But often the rate decision itself is already "priced in" by the futures market — the real volatility driver is the statement's language (forward guidance) and the Fed chair's press conference, which starts 30 minutes after the decision and can run an hour. A single phrase — "data-dependent" vs. "further increases may be appropriate" — can swing the market hundreds of points in SPY within minutes.

FOMC day has a predictable rhythm that experienced traders learn to use. Pre-announcement trading is typically cautious — range-bound, light volume, nobody wants to be wrong-footed by the decision. The moment the statement drops at 2 PM, markets react violently. Then the press conference begins at 2:30 PM and often reverses or amplifies the initial move as traders parse the Fed chair's words in real time. The "2 PM reversal" (where the initial reaction gets reversed during the presser) is so common it's almost a trading cliché.

For day traders, the practical approach is to respect FOMC day by reducing exposure ahead of the announcement, being patient for the initial move to exhaust itself, and then looking for follow-through entries once a direction is clear. Trying to trade the initial spike is dangerous — spreads widen significantly and fills can be terrible. Most experienced traders wait at least 5–10 minutes after the statement before placing any directional trades, then trade the follow-through trend into the close.