Good morning traders
The Fed announces at 2:00pm ET today (7:00pm UK), and the market has already made up its mind.
Futures put a hold at roughly 90%, a quarter-point hike at roughly 10%. If that's right, the rate itself will be old news by 2:01.
① Where it stands
On 16 September the Fed raised the range by a quarter point to 3.75% to 4.00%, by a 12 to 0 vote, and the statement said "Inflation remains elevated."
Today there's no dot plot, so the statement and the 2:30pm ET press conference are all the new information you get. Futures lean towards another hike on 9 December, which is why the wording matters more than the rate.
② The three sentences I'll read first
→ Inflation. Last time: "Inflation remains elevated." Softer reads as relief, harder reads as December.
→ Labor. Last time: "Job gains have kept pace with the workforce, and the unemployment rate has changed little."
→ Guidance. A hold with no hint of December is a different market from a hold that leans.
If there's a dissent, that tells you the committee is less sure than the market is.
③ What I decided before 2pm
→ Before the decision: nothing new goes on at full size.
→ After it: I don't trade the first candle. I wait for the press conference to finish.
→ Thursday: AMZN reports after the close, so it goes on manage when it does.
None of that depends on what the Fed says, which is why I wrote it down first.
Try it on one trade this week. Two lines, written before the number: what I do if the language is soft, and what I do if it leans towards December.
→ If you want to see where your own habits leak on a big number, the Investing quiz ends in a personal report and it's free: Take the Investing quiz