The running order
- 2:00pm Washington. The statement, and four times a year the projections with it. That is 8pm in Amsterdam in summer, 7pm in winter, and 1pm or 2pm in London depending on the season.
- Within seconds. Algorithms trade the changed words and the rate itself. This is the widest, thinnest minute of the day.
- 2:30pm. The press conference begins. The prepared remarks first, then the questions, and the questions are where the surprises live.
- Through the evening. Rate futures settle on a new path, and the dollar follows that path rather than the headline.
The four parts of a decision
The rate. Usually the least informative part, because it is priced days in advance. A decision that matches expectations moves nothing on its own.
The statement. Written to be compared with the last one. The sentences that changed are the message; a removed qualifier can be worth more than a whole new paragraph.
The projections. Four times a year the committee publishes where its members expect rates, growth, unemployment and inflation to go. A shift in the median expectation for next year is a shift in the path, and that is what the currency trades.
The press conference. The chair has to answer questions that the statement was written to avoid. The market listens for one thing: what would have to happen for the next move to come sooner or later than it currently believes.
Why the first move so often reverses
In the first minute, liquidity is thin and the trade is mechanical: a machine reads the headline numbers and buys or sells. In the hour that follows, people read the detail, the projections and the tone, and frequently conclude the opposite. That is why a chart of a Fed day so often shows a spike one way and a longer, steadier move the other.
It also means a stop placed inside that minute can be taken out at a price that never existed on your chart, because spreads widen while nobody knows where the market should be. If you trade a funded account, those same minutes are the ones your firm has a rule about, which is a separate reason to stay out of them. The rules of six firms are on our page for prop traders.
What to watch instead of the rate
- What the market priced going in. Without that number, you cannot call anything a surprise.
- The vote. Dissents say where the committee is heading before the median does.
- The gap with the other central bank in your pair. A hawkish Fed against an even more hawkish bank is not a dollar trade.
- The reaction of rates and equities, not just the currency. If all three disagree, the currency move is the one to distrust.
How we handle the day
The decision is flagged as event risk on the dollar and on every setup that holds it, with the time, before the day starts. The research itself does not try to predict the outcome: the score changes after the decision, once there is something to read, and the update log names what changed and why.
The other seven banks work the same way, with their own targets and their own calendars. Which numbers each one is steering on is in what a central bank steers on, and the next meeting for all eight is on the central banks page.