Federal Reserve
The Federal Reserve is the US and world's largest central bank. Federal Open Market Committee (FOMC) is tasked with managing US monetary policy. The board sets interest rates and manages money supply. They are driven by a 'dual-mandate', to maintain stable prices and to achieve full employment.
Federal Funds Rate
The Federal Funds Rate is set at regular meetings by the FOMC (policy setting body) of the Federal Reserve.
This interest rate is a target rate, which banks can borrow/lend their excess reserves as overnight. Fed Funds is a key rate which sets a benchmark for risk-free rates and the cost of money, as treasury securities yield and lending operations are dependent on this level.
Changes to the Fed Funds rate is in response to the US economy, and is set depending on inflation and employment numbers.
Fluctuations in this rate over time historically tend to have an inverse relationship with the stock market.
When and where?
Meetings are held 8 times per year, issued by the Federal Reserve
Meetings are typically held in Jan, Mar, Apr/May, Jun, July, Sep, Nov, Dec
Summary of Economic Projections
The Summary of Economic Projections is released quarterly, and is comprised of economic projections from the members of the FOMC.
This document provides insight to what expectations influenced the outcome of the target Fed Funds Rate.
Within the Summary, is a highly observed document called the 'dot plot'. This portion of the release reflects what members estimate interest rates will be set at going forward over the next several years.
When and where?
Quarterly report, per the Federal Reserve
Published alongside the Federal Funds Rate, towards the end of each quarter (March, June, September, December)
Meeting Minutes
Notes recorded during the FOMC meetings are released regularly after each policy decision.
These Meeting Minutes highlight the different proposals and their outcomes, as well as forward guidance and perceived risks.
Having more color on what led to a policy decision has the ability to move markets as it can confirm or refute market participant's assumptions.
When and where?
8 times per year, released by the Federal Reserve
Published three weeks after each FOMC meeting.
Beige Book
The Federal Reserve makes policy decisions through both macroeconomic data as well as three reports compiled by the 12 Federal Reserve banks.
This report is provided to the FOMC along with two other reports known as the Blue Book and the Green Book (not publicly released).
Regional Federal Reserve Banks offer their view of current economic conditions to help influence policy decisions.
When and where?
8 times per year, by the Federal Reserve
Released two weeks before each FOMC meeting
FOMC Blackout
FOMC members are subjected to a 'blackout period' in which they cannot speak publicly on issues regarding the Federal Reserve.
Starting on the second Saturday prior to the FOMC meeting, these members are barred from interviews and other public discussions. This blackout period ends on the Thursday following the meeting.