Federal Reserve Interest Rate Decision

The Federal Reserve interest rate decision is the most closely watched event on the economic calendar and can move the dollar, gold, stock indices and Bitcoin all at once within minutes. The Federal Reserve (Fed) is the central bank of the United States and decides on the country's benchmark interest rate several times a year. At the top of this page you can see the current rate, the date of the next meeting with a countdown in Tehran time, and the history of rate changes since 2000. This guide explains how the decision is made and announced, which part of it the market is most sensitive to, and how to manage risk on meeting night. To compare with other central banks, see the world central bank interest rates page.

What exactly does the Federal Reserve set?

The figure announced in the news as the US interest rate is the Federal Funds Rate: the rate banks pay to lend their reserves to each other overnight. The Federal Reserve sets this rate as a range with an upper and lower bound, and most of its changes come in quarter-percentage-point steps, although larger steps have been taken during crises. This rate reaches the entire US economy through bank loans, bonds and deposit yields, and from there spreads to global markets.

The Federal Reserve has two legal mandates: maximum employment and price stability. Its inflation target is 2 percent, and this target is measured by the PCE price index , not CPI. That is why inflation and employment reports in the weeks before the meeting shape the market's expectations for the next decision.

Who votes?

The decision is made by the Federal Open Market Committee (FOMC). The committee has twelve voting members: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the presidents of the other eleven regional banks, who rotate. A dissenting vote by one or more members is a signal the market watches to guess the path of upcoming meetings.

Fed decision announcement time in Tehran time

The FOMC holds eight scheduled meetings each year, each lasting two days. The decision is announced at the end of the second day, and half an hour later the Fed Chair's press conference begins. Since Iran does not observe daylight saving time, these times shift by one hour when official US time changes:

Part of the event	Summer (Tehran time)	Winter (Tehran time)
Rate announcement and statement	21:30	22:30
Press conference	22:00	23:00
Minutes (three weeks later)	21:30	22:30

In emergencies, the Federal Reserve can also hold unscheduled meetings and change the rate; such a decision is usually announced without prior warning.

How to interpret the Fed decision

The decision itself is usually not a surprise; the futures market has priced in the probability of a hike, cut or hold days in advance. The main move comes when the meeting's message differs from that expectation. Examine four parts separately:

• Rate: Did it match market expectations? A rate change against expectations is rare, but when it happens it creates the most volatility.
• Statement: A change of a few words in describing inflation or the labor market can signal a change of course. Analysts compare the text of each statement with the previous one.
• Members' projections: At four of the eight meetings (March, June, September and December), the Summary of Economic Projections and the "dot plot" are published, showing where each member sees the rate in the coming years.
• Press conference: The Fed Chair's answers to reporters' questions sometimes completely reverse the market's initial reading of the statement.

A hawkish tone means a preference for higher rates or keeping them high for longer; a dovish tone means a preference for cutting rates. The market's direction depends more on this tone than on the announced figure.

How the dollar, gold, stocks and crypto react

These relationships are tendencies, not rules. A more hawkish message than expected usually strengthens the dollar and pushes currency pairs such as EUR/USD lower. Gold , which pays no yield, becomes less attractive with higher interest rates and often falls. US stock indices and risky assets such as Bitcoin also usually react positively to cheaper money and negatively to more expensive money. A dovish message produces the opposite picture. Sometimes the market moves in one direction in the first hour and completely reverses by the end of the press conference.

Risk management on Fed meeting night

1. Follow the data from the preceding weeks. US inflation (CPI) and the employment report (NFP) have the greatest impact on market expectations for the meeting.
2. Be ready for two waves of volatility: one at the rate announcement and another during the press conference. A stop loss that was enough for the first wave may be triggered in the second.
3. Brokers widen spreads around the announcement, and order execution may come with slippage. Use the trader's calculator to size your position so that the worst-case scenario does not exceed your risk limit.
4. This event ends around midnight Tehran time. If you can't stay with the market until the end of the press conference, it's better to reduce or close your position beforehand.

None of these tips is a forecast of market direction or a buy or sell recommendation; their purpose is to make sure big news doesn't catch you off guard.