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Fundamental Analysis

What is FOMC and the affect of the data

Posted by Nifm
What is FOMC? The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System. The total no. of members in this board is 12--the seven members of the Board of Governors and five of the 12 Reserve Bank presidents.    FOMC is also called as Interest Rate Statement, Fed Statement and Monetary Policy Statement.   A permanent member of the Committee is the president of the Federal Reserve Bank of New York and serves as the Vice Chairman of the Committee.   FOMC meetings are mostly positive for stock market. The FED's purpose is to address banking panics, maintain the stability of the financial system, contain systemic risk in financial markets and strengthen economy growth. Therefore it is highly unlikely that FOMC meetings conclusions would be highly negative for stocks. This is the main cause for a positive drift.    Usual Effect: More Hawkish than forecast is indication of good condition of the economy that will be good for currency. FOMC meet is scheduled 8 times per year.   Importance: FOMC meet will affect the whole world indices, currency, commodities etc. Trader must be aware while trading around these days.

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