 |
Investopedia explains 'Federal Open Market Committee Meeting - FOMC Meeting'
Because the Fed determines interest rate policy at the FOMC meeting, the announcement following this meeting is very important. Speculation often occurs weeks in advance, about what will happen with interest rates following the meeting. The minutes of this meeting are released three weeks after the gathering. This is a vast improvement over the six to eight week lag that existed prior to December 14, 2004.
The expected change in rate (if any), is often priced into the markets prior to the announcement, which can cause drastic market action should the announcement be different from what was expected. Interest rate cuts can stimulate the economy, but at the same time, reduce the value of the currency.
|
