FOMC

The Federal Open Market Committee meets eight times a year to decide where US interest rates should be. The decision is published at 2:00 pm New York time on the second day of each meeting, and the chair answers questions from 2:30.

It matters to a stock trader because interest rates sit underneath the price of everything. When the decision — or, more often, the wording around it — differs from what people expected, the whole market reprices in minutes. It isn’t about any one company, so there’s nowhere in a portfolio of stocks to hide from it.

Say you’re holding five positions at 1:55 pm on a decision day, all doing fine. At 2:00 the statement lands, and within a few minutes all five are down 1.5% together. Nothing happened to any of those companies. Four of the eight meetings each year also publish the committee’s own rate projections, and those tend to be the livelier ones.

Unlike a company’s earnings, this lands while the market is open, so stops do work normally — the risk is a fast move, not a gap. The dates are published by the Fed about a year ahead.

Two other scheduled releases behave similarly and land earlier in the day, at 8:30 am: the monthly inflation report (CPI) and the monthly jobs report.