The Federal Open Market Committee (FOMC) is likely to repeat its previous statement and not provide any exciting news, as it did last time. Nevertheless, choppy trading will follow this release. FOMC Preview. Last month’s dramatic decision The previous FOMC meeting provided lots of action. The committee, lead by Ben Bernanke, decided to renew the Quantitative Easing steps. Up to this meeting, bonds that matured were absorbed by the central bank – the balance sheet squeezed. From that meeting onwards, the Federal Reserve would reuse the mone and buy government bonds. The initial reaction was a weaker dollar, as printing more dollars meant less value. But after many hours, the trend changed – the notion that the economic situation in the US is dire sent traders to buy the dollar – risk aversive trading. The statement included a clause about the economic recovery being more modest than expected. Pause in drama This FOMC meeting will probably be far less dramatic than the previous one – no significant changes in policy are due. Ben Bernanke is likely to continue the pledge to support the economic recovery continuing the bond buying scheme, keeping the balance sheet stable. Recent figures have been OK – not really good, but not disastrous as in August. Non-Farm Payrolls were better than expected, weekly jobless claims are on the fall, retail sales improved and more indicators could have been worse. So, this supports a pause this time. I don’t see a high chance of more extreme measures such as raising inflation targets, an idea that Bernanke raised in Jackson Hole but took off the table quickly. Extended period of time Regarding the Federal Funds rate, there’s a huge consensus that it will remain at a maximal level of 0.25%, and that the wording about future moves won’t change – the rate will remain at low levels “for an extended period of time”. Bernanke can always surprise and introduce more extreme measures such as additional quantitative easing steps. Goldman Sachs suggested that a new scheme, in a scale of one trillion dollars will be introduced in November. This depends on data that will be accumulated till then. In the meantime, the “wait and see” scenario is of higher probability, at least for this decision. I think we will see choppy trading in the hours around the meeting but no long term effect. Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next Fundamental Overview – Market Movers Last Week – Yohay Elam 12 years The Federal Open Market Committee (FOMC) is likely to repeat its previous statement and not provide any exciting news, as it did last time. Nevertheless, choppy trading will follow this release. FOMC Preview. Last month's dramatic decision The previous FOMC meeting provided lots of action. The committee, lead by Ben Bernanke, decided to renew the Quantitative Easing steps. Up to this meeting, bonds that matured were absorbed by the central bank - the balance sheet squeezed. From that meeting onwards, the Federal Reserve would reuse the mone and buy government bonds. The initial reaction was a weaker dollar, as printing… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.