The Federal Reserve will release meeting minutes showing members argued about interest rates. This qualifies as news because someone decided internal disagreement at a central bank constitutes a family fight. Families fight about inheritance and who said what at Thanksgiving. The Fed fights about twenty-five basis points while wearing suits that cost more than your car.
The summary notes the Fed rarely makes just one rate move in a cycle. Rare means it happens sometimes. Sometimes means it could happen now. Could means your trading thesis is built on historical patterns that may or may not repeat. May or may not repeat means you're guessing. You're guessing means you already lost money on this headline.
The minutes will show disagreement. Disagreement means some Fed members wanted to cut rates and others wanted to hold. Both groups have PhDs. Both groups have access to the same data. Both groups reached opposite conclusions. This inspires confidence in exactly no one but retail traders still trade the news because they read squabble in a headline and thought it meant something actionable.
The real story is the fight could drag on for a while. Drag on means more meetings. More meetings means more minutes. More minutes means more headlines about disagreement. More headlines means you'll read another version of this exact article in six weeks and pretend that one matters too.
Technical analysis says none of this appears on a chart. Price moved before the meeting. Price moved after the meeting. Price will move before the minutes release. The minutes will explain why price already moved. You'll read the explanation and convince yourself you understand something. You don't.
The Fed argues about rates while you argue with your broker about why your stop loss triggered at the worst possible price.
Photo by Brett Jordan on Unsplash
Leave a Comment