#FOMCMeeting Everything you need to know about the Federal Open Market Committee (FOMC Meeting)
The FOMC meeting is one of the most important economic events that financial markets around the world are anticipating. Committee members meet 8 times a year (or more in exceptional cases) to determine the monetary policy of the United States, particularly the interest rate that directly affects borrowing costs, corporate investments, currency movements, and stock markets.
Why is it important?
The meeting decisions do not only affect the US economy, but their impacts extend globally. For example:
Raising interest rates: means tightening monetary policy, which drives investors towards the dollar as a safe haven, and often leads to a decline in the prices of risky assets such as stocks and cryptocurrencies.
Lowering interest rates: stimulates the economy by making borrowing cheaper, which supports stock, commodity, and cryptocurrency markets.
A decision with a hawkish or dovish tone: even if interest rates do not change, the monetary policy statement or Jerome Powell's press conference may carry signals for the future of monetary policy, which immediately moves the markets.
How does the market react?
Before the meeting, markets experience strong speculative movements based on expectations, but the real event begins with the official announcement and the accompanying statement. The most important aspects that traders watch for:
1. The interest rate decision itself.
2. Future expectations for growth, inflation, and interest rates (Dot Plot).
3. Jerome Powell's words in the press conference.
How do you benefit?
If you are a long-term investor, watch the overall direction of monetary policy as it affects stock and currency valuations.
If you are a speculator or day trader, prepare yourself by identifying support and resistance levels, and use stop-loss orders because the movements can be very volatile during the event.
Summary