The Fed - The Federal Reserve System created to exercise centralized control over the commercial banking system.
• fulfilling the responsibilities of the central bank of the USA
• maintaining a balance between the interests of commercial banks and national interests
• ensuring oversight and regulation of banking institutions
• protection of consumer credit rights
• supporting the growth of monetary aggregates, corresponding in the long term to the economic potential for production increase
• promoting effective achievement of maximum employment goals
• maintaining price stability and ensuring moderate long-term interest rates
• ensuring the stability of the financial system, controlling systemic risks in financial markets
• providing financial services to depositories, including the U.S. government and official international institutions
• participation in the functioning of the system of international and domestic payments
• eliminating liquidity problems at the local level.
This is exactly why the Fed regulates the overall economic situation by raising or lowering rates, balancing between inflation and deflation.
Every month, meetings take place where interest rates are manipulated; depending on this, the market reacts in the moment with either a decline or an increase. But not just the numbers matter, but also the overall rhetoric of the head of the Fed; if he hints at further increases and tightening of policy, the market reacts with a decline, and conversely, if after a rate hike the rhetoric is Dovish (positive), the market may start to rise contrary to expectations.
For everyone working in the market, whether it's cryptocurrency or stocks, it is important to keep an eye on the Fed's reports; this is one of the factors that should be considered when analyzing the situation both locally and globally.
I wrote this in simple words so that anyone who reads it can understand in general terms what it is and why it affects the market, but there are many points that I don't see the point in writing about because it would turn into not an article but a whole book.
The conclusion is simple: if you want to understand the market, you should study the topic; for starters, Google 'what is the Fed.' Without understanding this, you will be surprised at why at a certain moment, contrary to the lines you drew on the chart (technical analysis doesn't work), the market made a quantum leap or fell so fast that you couldn't understand how it happened. :)
For fans of technical analysis - no indicator, no triangles, and no other shapes will help you understand what Powell said at the press conference and when it will happen. At the same time, for all lovers of day trading (suffering from nonsense), I recommend delving deeper, as knowing the date of the meeting, the time, and the rhetoric of the Fed's head will make it easy for you to determine the local trend. 😉
Closed club - $
