Fed rate decision
🌍 MacroThe Federal Reserve changes interest rates or signals its future path.
Typical size
0.5-3% on the index; more for rate-sensitive names
Timeframe
Same day, with follow-through for weeks
Evidence
3 logged events
Why it moves the price
Rates are the discount rate applied to all future cash flows. Higher rates mathematically reduce the present value of distant earnings, and change the relative appeal of bonds versus equities.
What separates a good call from a naive one
The decision itself is usually priced in — the move comes from the statement and press conference versus expectations. Long-duration growth stocks and unprofitable companies react far more violently than value or cash-generative names.
Measured impact
Every logged event is measured against real closing prices: the move from the close before the event, compared with the S&P 500 over the same window.
Next day
-1.93%
- Median
- -2.51%
- Moved up
- 0% of 3
- vs S&P 500
- 0.00%
After 1 week
+0.10%
- Median
- -0.49%
- Moved up
- 33% of 3
- vs S&P 500
- 0.00%
After 1 month
+3.05%
- Median
- +3.42%
- Moved up
- 67% of 3
- vs S&P 500
- 0.00%
The logged evidence is mixed, which is common for context-dependent factors. Based on 3 measured events.
The evidence (3)
Every row is a real event, measured against actual closing prices.
| Date | Stock | What happened | Next day | 1 week | 1 month | vs S&P |
|---|---|---|---|---|---|---|
| Dec 18, 2024 | SPY | Rate cut delivered but the projected path turned hawkish The decision was expected; the projections were not. | -2.98% | -0.49% | -0.21% | 0.00% |
| Sep 18, 2024 | SPY | First rate cut of the cycle, a larger 50bp move | -0.30% | +1.46% | +3.42% | 0.00% |
| Nov 2, 2022 | SPY | Rate rise delivered with a notably hawkish press conference Macro factors are tracked on the S&P 500 ETF, so the 'vs S&P' column is zero by definition. | -2.51% | -0.66% | +5.95% | 0.00% |
Measured from historical closing prices. Past reactions do not guarantee future ones. Not financial advice.