Be Prepared for the Release of the FOMC Statement

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Board of Governors of the Federal Reserve System

The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.

Press Release

Federal Reserve issues FOMC statement

Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-3/4 to 2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams.

Be Prepared for the Release of the FOMC Statement

By Annie Reona | Tuesday, July 28th, 2020

Eight times throughout the year, the Federal Open Market Committee (FOMC) meets to discuss the overall state of the economy and to decide on interest rates. History has shown that the release of their decision nearly always stirs up the markets, making it a great time to get some trading in, particularly in the Forex markets.

The forex markets that are most changed by the release of the FOMC Statement are AUD/USD, EUR/USD, GPB/USD, USD/CAD, USD/CHF, and USD/JPY. This is because the interest rate that will be voted on and that could potentially change is the Federal Funds Rate, which is what banks use when lending balances to other banks which are being held at the Federal Reserve.

Both the Federal Funds Rate and the official FOMC Statement will be released on Wednesday, July 29, 2020 at 2:00 PM ET. Analysts that have studied the trading trends that follow the releases of these statements have determined that an Iron Condor strategy using Nadex spreads is the most preferred. A Nadex spread is preferred because of its defined limited risk.

Keep in mind as the trading begins that the changes in the market are usually rapid and only remain for a short period of time. When the Iron Condor strategy is set up correctly and the trader is prepared for the fluctuations in the market to occur and then the normalization of the market, they can profit greatly during this brief period of time.

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The Iron Condor strategy involves setting up two trades at once, one as a ceiling and one as a floor. The benefit of this strategy is that so long as the trade expires within that range, the trader profits. This is because the lower trade will profit if the trade expires higher and the higher trade profits if the trade expires lower.

This type of strategy greatly reduces risks and allows traders to increase their profits. When it comes to trading after the release of the FOMC statement, this strategy will allow traders to make the most profit as the market normalizes because the trades will likely expire somewhere in the middle of the spread, which means both the lower trade and the higher trade will be at the maximum profit level.

Board of Governors of the Federal Reserve System

The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.

Press Release

September 26, 2020

Federal Reserve issues FOMC statement

Information received since the Federal Open Market Committee met in August indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2 to 2-1/4 percent.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the FOMC monetary policy action were: Jerome H. Powell, Chairman; John C. Williams, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Richard H. Clarida; Esther L. George; Loretta J. Mester; and Randal K. Quarles.

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