FOMC

The FOMC calendar and what to mark

Eight FOMC meetings per year, roughly every 6 to 8 weeks. Four of them (March, June, September, December) include the Summary of Economic Projections (SEP) with the dot plot, and these are the high-impact meetings. The other four are interim and rarely produce major rate-path repricing unless the statement language shifts materially. The full Fed calendar is published a year ahead on federalreserve.gov.

• Statement release: 2:00 PM ET
• Powell press conference: 2:30 PM ET (typically 45 to 60 minutes)
• SEP and dot plot: released only at the quarterly meetings
• Blackout window: 10 days before each meeting, FOMC voters refrain from public commentary on policy

How markets price FOMC days

Implied volatility on SPY, QQQ, and TLT typically rises 2 to 4 points in the week before a meeting and crushes the day after. S&P futures show an average range of about 70 basis points in the 30 minutes following the statement, roughly 3x a normal half-hour. Algorithmic positioning ahead of the meeting tends to be light, with most of the volatility coming from real-money rebalancing after the statement and press conference.

Reading the statement diff

The most informative move is comparing each statement word-for-word against the previous one. A shift from "inflation has eased over the past year but remains elevated" to "inflation has been making progress toward 2%" is a major dovish tilt, even if the rate decision is unchanged. Bloomberg, Reuters, and the Wall Street Journal publish redlines on the day of the meeting; the changes that matter often come from a single sentence.

The dot plot: what to actually look at

The dot plot displays each of the 19 FOMC participants' projection for the Fed funds rate at year-end for the next several years. Three numbers matter most: the median dot for the current year, the median for next year (the glide path), and the median longer-run rate (the Fed's view of neutral). A shift of 25 basis points in the median next-year dot is large. A shift of 50 basis points is regime-changing and almost always moves SPX 1% or more on the day.

Trading FOMC: the most common retail mistake

Buying naked SPY or QQQ calls or puts the morning of the meeting to express a directional view is the most common, most expensive mistake. Implied volatility is already elevated, so even a correct directional call often loses to vega crush. Vertical spreads, calendars, and iron condors structured around the expected move tend to dominate naked options empirically. The Fed funds futures market gives a clean estimate of priced-in probabilities; use that as your baseline before betting on a surprise.

Powell pressers: pattern-recognition cheat sheet

The first 20 minutes of the press conference are typically scripted opening remarks. Volatility comes in the Q&A when Powell either confirms or contradicts what the statement implied. Phrases like "we are in no hurry," "we will see the totality of the data," or "we are well-positioned" tend to be intentionally noncommittal. Surprises come from concrete numbers ("we expect two cuts this year") or specific reaction functions ("if inflation moves toward 2% we would cut"). Listen for those.