In this article I’m going to talk about a major FOMC meeting which is happening this week in the US. This meeting is scheduled for the 28th or 29th April. These types of meetings can affect the stock market – they can cause the price to dramatically increase or drop, during the meeting, depending on what the FEDS say in relation to what they are doing with the interest rates in America. Let’s jump into it and find out why…
FOMC meeting
Tomorrow will be another FOMC meeting in America. During these meetings, the Federal Reserve Bank decides whether or not to increase or decrease rates of interest in America. Briefly, when interest rates change, this can have an impact on the stock market. This is because borrowings are either more or less expensive for businesses and they are able to scale up or down more easily, and their businesses are cheaper or more expensive to run, depending on what they do with the rates, which can either lead to more or less profit being made. This in turn has an impact on the stock market and the share prices and especially during the FED meeting. The reason for this is that the stock market investors are factoring in, what they perceive will be the impact of the FED’s decision on the price of the stocks.
There is an FOMC meeting taking place tomorrow. You can find the details of these types of meetings, here, on a separate page of the blog:Key links for your fundamental analysis – everything you need to know – Sophia Trades – Learn how to Trade the Stock Market
If you go to FED calendars on the link above you will see the following screen on their website. You can see there is a meeting scheduled for 28th to 29th April.
When we get close to the time of the meeting, the stocks do sort of ‘stagnate’ slightly… I can see that stagnation is happening currently. I’ve closed out of a few of my major positions while this is happening. I will be waiting to see what the FEDS say about the interest rates, in the meeting.
If they say the interest rates are going to go down, it may result in the stock prices increasing – even during the meeting. The opposite is true as well. You can often literally see the price of the NASDAQ jumping around on the chart, while the FED meeting is going on and while they are taking questions from the reporters.
It will be interesting to see what they decide tomorrow!
I hope you found this article helpful!
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