Today is the much anticipated FOMC rate decision. It is expected that the Fed will keep rates where they have been for the last few years. The only real change we will be looking for is to see if the taper continues. It is expected that another $10 billion of tapering will come off, bringing the bond purchase program to $45 billion per month.
Our only real concern is how the market will react from the statement. The last meeting Janet Yellen hinted at a possible rate increase 6 months after the taper was complete. This caught the market off guard and produced some market gyrations. There will not be a press conference this time around, with just a statement being released at 2pm EST. Fed meetings can often provide some good trading opportunities, both intra-day and for swing trading.
Below is a chart going back over the past 12 months. I have drawn white vertical lines indicating the days of previous Fed meetings. Some meetings have marked short term lows, while others have marked highs. What will come from today's meeting? Stay tuned.
Elite Round Table, Pro Trader