The Fed raised rates Wednesday. Everyone saw it coming. Markets priced it in weeks ago. Financial journalists wrote the article before the meeting even started.
Here's what you need to know: nothing. The five takeaways are worthless. They're dressed-up descriptions of a thing that already happened. Reading them won't help you trade. They won't help you invest. They exist because someone needed to fill space between mortgage ads.
Retail traders will read all five takeaways. They'll nod along. They'll feel informed. Then they'll open their brokerage app and buy calls on a biotech company they can't pronounce because someone on Twitter said it was going to the moon. The Fed's decision will have zero impact on this choice. The takeaways will have zero impact on this choice. But they'll feel smart for fifteen minutes.
The actual content of these takeaways? Probably something about inflation targets. Maybe a line about labor markets. Definitely a paragraph explaining what the dot plot means, as if anyone has ever made money by understanding the dot plot. One takeaway will be about forward guidance. Another will note that Powell said something boring in a slightly different boring way than last time.
Technical analysts don't read Fed takeaways. They look at charts. The charts don't care what Powell said. The charts don't care about the five key points. The charts just move, and you either catch the move or you don't.
But sure, print out the takeaways. Highlight them. Pin them to your vision board next to your Robinhood loss porn screenshots.
Photo by Marek Studzinski on Unsplash
Leave a Comment