FOMC began announcing its monetary policy decisions in 1994, US stocks have experienced large excess returns in the 24 hours preceding these announcements. These abnormal returns account for more than 80 percent of the U.S. equity premium over the past seventeen years

FOMC began announcing its monetary policy decisions in 1994, US stocks have experienced large excess returns in the 24 hours preceding these announcements. These abnormal returns account for more than 80 percent of the U.S. equity premium over the past seventeen years

A NY Fed staff research paper noted that since the FOMC began announcing its monetary policy decisions in 1994, US stocks have experienced large excess returns in the 24 hours preceding these announcements. These abnormal returns account for more than 80 percent of the U.S. equity premium over the past seventeen years. Other major international equity indexes have experienced similar abnormal returns before FOMC announcements. For 2012 alone, our calculation shows that the S&P 500 on average returned +0.87% on FOMC days. The index has also seen a cumulative return of +5.20% (of the +12.4% YTD returns for 2012) on FOMC days this year.