FOMC day timeline
| Time (ET) | Event | Volatility |
|---|---|---|
| Pre-market | Low volume, positioning | Low |
| 9:30 AM - 1:30 PM | Range-bound chop | Low-Medium |
| 2:00 PM | Rate decision released | SPIKE |
| 2:00 - 2:30 PM | Initial reaction + reversal | Very High |
| 2:30 PM | Powell press conference begins | High |
| 2:30 - 4:00 PM | Trend sets in | High |
Common FOMC day patterns
The fake-out reversal
The initial move at 2:00 PM frequently reverses during the press conference. The market digests the statement first, then reacts to Powell's tone and Q&A.
The "sell the news" effect
If the decision is fully priced in, markets often reverse the prior trend. A widely expected rate cut can lead to a sell-off if forward guidance is hawkish.
Practical strategies
Reduce position size before 2:00 PM — volatility expands dramatically
Wait for 2:35-2:45 PM to enter — let the initial noise settle
Watch the bond market (TLT, /ZN) — bonds often lead the equity reaction
VIX crush is reliable — selling volatility after FOMC (if no surprise) is a well-known edge
Don't fight the trend after 3:00 PM — the final hour direction usually holds into the next day
What NOT to do
Don't hold large directional bets through the announcement
Don't chase the 2:00 PM move — it reverses more often than it continues
Don't ignore the dot plot — it matters as much as the rate decision