How to trade the Federal Reserve decision

 

Here’s how stocks, bonds, commodities and dollar may react

he main question hanging over financial markets right now is when and how the Federal Open Market Committee will scale back its bond purchases, seen as one of the biggest drivers for investment moves this year.

After a two-day meeting, the FOMC will release its monetary-policy decision on Wednesday and afterwards Federal Reserve Chairman Ben Bernanke will answer reporters’ questions at a news conference.

That’s why Wednesday is shaping up to be a big markets day. MarketWatch reporters analyzed how various asset classes may react, depending on the message the Fed sends to the financial markets. Read: Here’s proof that Bernanke’s news conferences impact markets.

read more ...

Reason: