FOMC: Two Things to Watch
With today's FOMC meeting, here are two key things to keep an eye on.
3/20/20242 min read
It is once again every trader's favorite (maybe?) day, it's time for the FOMC interest rate decision! Going into today's 2pm EDT decision and 2:30pm EDT Jerome Powell press conference, there are really two key things I'm paying attention to in order to determine what might happen with the markets. And no, the actual interest rate decision is not one of them. It's basically a given that there will be no change to the interest rate. If you want to get a glimpse into my thoughts, just keep on reading.
The first thing I'm watching is the Summary of Economic Predictions (SEP) Dot Plot. Yes, we will all be looking at dots on a chart today to figure out where our silly little candlesticks on a chart are going to go. The Dot Plot, for those who might not know, is essentially all of the Fed participants short- and long-term estimates of interest rates. It is released every other FOMC meeting to coincide with the end of the quarter. The last dot plot, released in December, showed three rate cuts in 2024 as the most likely scenario, with rate cuts in June being the target for a first rate cut. This sparked hope in the markets that there might be even more rate cuts than anticipated. However, since that time, inflation has remained sticky and the likelihood of three rate cuts has been diminishing. If the dot plot shows only two rate cuts forecast for 2024... well, pay attention to the market's reaction.
The second thing I'm watching is Powell's comments in the press conference. If he continues to bang the drum on "higher for longer" hawkish comments, drives home any points about inflation being sticky and them continuing to do what is necessary to achieve their 2% inflation target, or really says anything about inflation not going down as quickly as they want, there will likely be a significant reaction. Powell's press conference is my personal favorite time to trade, because once he sets the tone there's usually a decent trend one direction or another.
Trade smart, trade safe, and if you don't do well in whippy volatility feel free to just watch the press conference and the charts from a safe distance.
Here are my NQ levels for today:
Current Price: 18320
Upside Targets: 18351, 18377, 18436, 18491
Downside Targets: 18280, 18252, 18182, 18121
Stretch Targets: 18506, 18575, 18029, 17968
