There are many events in the economic calendar a forex trader should follow to get useful information on the Federal Reserve’s monetary policy. For instance, the central bank publishes its economic projections on the U.S. economy in the “Summary of Economic Projections,” a document published four times each year. Those forecasts, published along with the FOMC post-meeting statement, provide participants’ assessments of the most likely outcomes for several macroeconomic variables (GDP growth rate, unemployment rate, inflation, federal funds rate, and so on). All these variables have an impact on the most important exchange rates involving the U.S. dollar. Projections are based on the participants’ assessment of appropriate monetary policy and assumptions about the factors likely to affect economic outcomes. Furthemore, the Fed Chair holds press conferences following each of the four FOMC meetings per year at which participants provide their projections, and discusses current and prospective monetary policy.
The FOMC’s communication strategy extends beyond the post-meeting statements and minutes. By statute, the Fed Chair must testify twice each year on economic developments and monetary policy before the congressional committees that oversee the Fed. At those times, the Board of Governors delivers the semiannual Monetary Policy Report to Congress. The report discusses the conduct of monetary policy and economic developments, and prospects for the future.
Moreover, the Board members testify frequently before Congress on economic and financial market conditions and on monetary and regulatory policy. Fed’s officials regularly give public speeches and a wide range of documents is made available. All these speeches may be found in the most famous economic calendars. Moreover, all these documents and events help forex traders to better understand the Fed’s current and future monetary policy stance, and to undertake profitable trading strategies.