How FOMC meetings affect markets

The eight days a year that move every asset class.

TL;DR

The Federal Open Market Committee meets eight times a year to set US rates. These eight days move every asset class. The most important scheduled days on the trading calendar.

Schedule

Eight meetings per year. Decision at 14:00 ET, press conference at 14:30 ET. Half include an updated Summary of Economic Projections (SEP) — the dot plot.

What gets released

Three documents.

→Statement — the formal rate decision (~600 words)
→Press conference — Powell's remarks + Q&A
→Quarterly: SEP + dot plot — where each member sees rates over 3 years

How markets trade

Markets price the expected decision into Fed Funds futures in advance. Reaction is to deviations.

→Hawkish surprise — fewer cuts than expected → dollar +, yields +, stocks −
→Dovish surprise — more cuts than expected → dollar −, yields −, stocks +
→In-line decision, hawkish press conf → same as hawkish surprise

Worked example

Anatomy of a March FOMC day

Market prices 25bp cut, expects 3 more cuts in 2026.

114:00 statementDelivers 25bp cut
2Initial reactionMuted — priced in
314:00 dot plotShows only 2 cuts in 2026 (vs 3 expected)
4ReactionYields +8bp, DXY +0.5%, S&P -1.0%
514:30 press confPowell: 'time to be patient'
6End of dayS&P -1.6%, 10Y +12bp, DXY +0.8%

Takeaway

Two distinct reaction windows: 14:00 (statement/dots) and 14:30 (press conference). Trading the first reaction often misses where the day settles.

Common mistakes

What to avoid

!Trading the rate decision — usually priced in
!Skipping the press conference — most of the day's move happens there
!Ignoring the dot plot
!Relying on the first 5-minute reaction

Self-check

Test yourself

Q1How often does FOMC meet?+

Eight times per year.

Q2What's the dot plot?+

Chart showing each FOMC member's projection for the Fed Funds rate over 3 years + long run.

Keep reading