Federal Reserve watching is keeping on top of current Fed thinking and predicting who the Fed will behave in the future1.
- When watching Fed communication from the Federal Open Market Committee people pay attention when a traditionally dovish or hawkish member flips in the other direction1.
Federal Reserve Communication Options
- FOMC Statement: carefully worded statement after the Federal Open Market Committee meeting that summarizes view on the economy and the actions it will take to achieve its mandate.
- FOMC Press Conference: One hour chair press conference after the meeting. It is important because the chair is speaking more off the cuff and gives clues to sentiment
- FOMC Minutes: released three week after the meeting takes place. Consists of reviews of the economic and financial conditions during inter-meeting period and then discusses the views of the FOMC for the outlook. The minutes often foreshadow policy moves in the coming months
- FOMC “Dot Plot”: Economic projections on real economic growth, inflation, and unemployment rate. Each FOMC participant has a dot for their policy target range. The more consensus there is, the more the market will move.
- Fed Official Speeches: official speeches from FOMC members
- Fed Interviews: off-schedule interviews by important FOMC members are taken seriously and often given when the Fed feels the market has misunderstood. Additionally, the Fed Chair is interviewed bi-annually by Congress but this often repeats of other communications and perfunctory.
- Desk Operating Statements: the operating policies and calendar for the Fed’s buying and selling of securities through it’s Desk
- Fed Balance Sheet: the size of the Fed balance sheet can indicate interest direction (large sheet, lower rates in the future, higher asset values) and the composition can show which markets are strained
- FIMA Accounts are ‘collaterized’ checking accounts structured as a Repo Transaction forieng official sector clients (governments and central banks)
- Desk Surveys: market surveys for the Fed to determine the market sentiment
- Fed Research: Research publications by the Fed which contain work products based on confidential information which can expose information about the markets.
- Noteworthy publications:
- Fed Surveys: market surveys for the Fed to determine economic conditions. Notable ones arre the Beige Book and the Senior Loan Officer Survey