Of course, the meeting itself was not the only opportunity for FOMC
members to interact.
In June 2011, the FOMC
expanded the SEP by including participants' assessments of uncertainty around their projections and the perceived distribution of risk for each of the projected variables.
In addition to disliking large changes in the level of the funds rate, the FOMC
might also have wanted to avoid any change in the pace of change it had been making to the rate.
asset prices to the information contained in the FOMC
Take the FOMC
's strategy surrounding the federal funds rate.
The structure of the FOMC
is well known: the 12-member committee is composed of the seven board members on the Board of Governors in Washington DC and five of the presidents from the 12 Federal Reserve Banks (for additional detail, see Purposes and Functions, 2005).
We also find that larger financial market reactions tend to be associated with communication from the Fed Chair, non-Chair Fed governors, and FOMC
meetings without an associated press conference.
After the announcement of the interest-rate decision, along with the FOMC
's statement and projections on interest rates and economic indicators, the stock market nearly erased a substantial midday loss, indicating that investors were rather happy with what they heard.
The researchers defined a monetary policy surprise, or "shock," as a policy announcement for which the FOMC
announced a rate that was lower or higher than the rate that had been predicted by federal funds futures contracts prior to the FOMC
ING said in a research note that this week's focus would be the FOMC
meeting and President Trump's appointee to the top post at the US Fed.
In January 2012, the Federal Open Market Committee (FOMC
) began publicly releasing its participants' projections for the future value of the federal funds rate in its quarterly Summary of Economic Projections (SEP).