FOMC Dates

Indicator Name: FOMC Dates
Screen Name: EKAM
Study Type: ShowMe
Time Frame: Daily
Date Posted: 01/09/2004
Categories: Multiple Disciplines
Description: Displays a ShowMe of all FOMC Dates.

ELD FILE: FOMC.ELD (3.8 K)

About the Author/Submitter: EKAM

How it works: This ShowMe simply displays a reference point on past FOMC dates which could influcne the stock, interest rate and currency markets. Apply this ShowMe to the interest rate markets (i.e. US, TY, FV) to see first hand just how much influence the FOMC meeting can be on the markets.

What is the FOMC?: The Fed's FOMC (Federal Open Market Committee) has primary responsibility for conducting monetary policy. The FOMC meets in Washington eight times a year and has twelve members. The Fed can't control inflation or influence output and employment directly; instead, it affects them indirectly, mainly by raising or lowering a short-term interest rate called the "federal funds" rate.

The major tool the Fed uses to affect the supply of reserves in the banking system is open market operations. That is, the Fed buys and sells government securities on the open market. These operations are conducted by the Federal Reserve Bank of New York.

Suppose the Fed wants the funds rate to fall. To do this, it buys government securities from a bank. The Fed then pays for the securities by increasing that bank's reserves. As a result, the bank now has more reserves than it wants. So the bank can lend these unwanted reserves to another bank in the federal funds market. Thus, the Fed's open market purchase increases the supply of reserves to the banking system, and the federal funds rate falls.

When the Fed wants the funds rate to rise, it does the reverse, that is, it sells government securities. The Fed receives payment in reserves from banks, which lowers the supply of reserves in the banking system, and the funds rate rises.

Click here for an FOMC overview in a PDF format.


Function Information:

Attached is a function which returns a boolean which indicates if the supplied date is an FOMC day. It should be useful in backtesting your strategies, if it is part of your strategy to avoid trading on FOMC days.

Note that it only contains the currently known dates. When unannounced FOMC dates and other FOMC dates in the future beyond 2005 are made available, this function needs to be updated to keep up. The funtion (FOMCdates) is included inthe above ELD download. Note the funtion NOT the ShowMe is to be updated with future FOMC dates. Use the link below for updating.

Offical FOMC Dates:

http://www.federalreserve.gov/FOMC/#calendars

TradeStation Forum Link(s):

https://www.tradestation.com/discussions/Topic.aspx?Topic_ID=21022