FOMC June 2006 Meeting - What will the FED do? - page 2
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FOMC June Meeting Decision and Aftermath
FOMC June Meeting Decision and Aftermath - The Fed raised its fed funds rate by 25 bps to 5.25% on June 29, a move expected by most analysts, but the statement was a suprise. You can see the full analysis on the decision here: FOMC June Meeting Decision
Here are some of the aspects that I cover:
1. The FED maintained its description of inflation expectations as "remain contained" while the impact of resource utilization and rising energy prices to continue to only "have the potential to sustain inflation pressures".
2. However, the FED changed the part of the statement regarding economic growth. FOMC gave this assessment of the US economy in it's June 29 statement: indicators suggest that economic growth is moderating from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.
3. Regarding future decisions, the FED said: "The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information. In any event, the Committee will respond to changes in economic prospects as needed to support the attainment of its objectives".
The statement as a whole was dollar negative and dovish. The FED issued a more certain note towards moderating economic activity, while making no upgrade in its inflation vigilance.
News Trading
Like I said, I just reacted to the market. I don't even know what the FOMC announcements were, just let the EA do what it does best... follow the rules.
Hi Maji
Are you willing to share what system you use for News Trading ?
Many thanks
Like I said, I just reacted to the market. I don't even know what the FOMC announcements were, just let the EA do what it does best... follow the rules.
What EA ? So did you manage to pick up most of those pips? If so, very nice.
Kiwi and Morpheous,
The system was described in by a poster named Rick, with id NWRK or something very similar on the StrategyBuilderFX forum. Please search the topic on Newtrading there for more information on this system.
By the way, a plain simple straddle placed just before the news would have been good enough to make decent pips during this announcement. That is why I think why bother to predict what the news will be. Just be prepared to react to what the market does. It was almost a consensus that the Feds will raise the rate by 25 basis points, and they did that. Still there was a spike. The equity markets shot up while the US dollar tanked. Who cares as for why this is happening... just trade the price action.
Maji