FOMC Announcement at 2:15 ET Today

by Tom Nunamaker on September 21, 2010

E-mini S&P 500 1138.25 +1.75
EUR/USD 1.31147 +0.0061
30-Day Fed Funds 99.8050 -0.0025
Gold 1281.0 -10.7

The big news today is the FOMC meeting announcement at 2:15 Eastern TODAY!  Expect the market to be quiet until the announcement.  After the announcement, it could get wild for the next few minutes.  The Consensus is for the Fed to leave Fed Funds Rate in the 0.0% to 0.25% range.  They don’t have a lot of room to maneuver with rates at this point so shouldn’t be much of a surprise imo.  Traders will be looking for words about the Fed’s thinking about Quantitative Easing (QE).

Housing starts came in above the consensus at 0.598M vs 0.520M to 0.575M consensus values according to Econoday.  Not much market reaction as everyone is waiting for the FOMC announcement.

The Euro continues its strength against the US Dollar.   I’m currently long on the EURUSD on a daily chart.  DailyFX.com had a good summary of how to trade the FOMC announcement from a currency trader perspective.  If the Fed thinks the economy is growing and isn’t going to expand monetary policy further, look for the EURUSD to go down.  If the Fed seeks to expand monetary policy, the EURUSD should rise.

The volatility will certainly increase after the announcement as traders digest the news.  Be prepared to adjust your positions if they are threatened!

Picture of the Day

panoramic view of Keswick, a market town in Cumbria, the northwesternmost county inEngland, as seen from Latrigg, a fell north of the town. Derwentwater and adjacent fells can be seen in the background. The area lies within the boundaries of Lake District National Park.

Photo: David Iliff

Keswick, a Market Town in Cumbria, England

Keswick, a Market Town in Cumbria, England

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