U.S. Federal Reserve members talk to the markets constantly. Between meetings, officials give speeches, testify before Congress, and drop clues about where interest rates could be headed.
Then, eight times a year, the Fed goes quiet.
Since midnight on Saturday, September 5, every Federal Reserve official has been under a formal communications ban. No speeches, no interviews, no carefully worded hints about what is coming at the September 15-16 meeting.
The blackout period is in effect, and it runs through September 17.
What Is the Fed’s Blackout Period?
The blackout begins at midnight Eastern Time on the second Saturday before each FOMC meeting and ends at midnight on the Thursday after the meeting concludes.
It applies to every FOMC participant, including the Chair, all governors, every regional bank president, and relevant staff members.
The rule is largely about keeping the markets fair. If an official hints at an upcoming rate decision during a speech, traders who hear it may try to front-run the announcement. This creates an information advantage the Fed can’t allow.
The blackout also protects the Fed’s internal discussions. Comments from individual officials in the days before a vote could reveal where the debate is heading before the committee has reached a decision.
By limiting public remarks, the blackout allows the Fed to speak with one voice once policymakers have agreed on what they want that voice to say.
Promoted: The Fed Can Go Quiet. Your Account Security Shouldn’t.
Major inflation reports and live Fed decisions can have you jumping between brokerage, charting, and news accounts. LastPass helps generate and store strong, unique passwords, giving you one less thing to worry about when markets get noisy.
Try LastPass for Free Today! Disclosure: We may earn a commission from our partners if you sign up through our links, at no extra cost to you.
Where Does the Committee Stand Going In?
Because officials know the silence is coming, they often use the final days before the blackout to steer market expectations as clearly as possible.
Chair Warsh set the tone with a hawkish keynote at the Jackson Hole symposium on August 28. His remarks helped lift rate hike odds from roughly 30 percent to 48 percent in a single session. Governor Barr reinforced that message, saying the Fed should act decisively if inflation didn’t moderate.
Governor Waller pushed back on September 3, signaling a preference for holding rates steady after seeing encouraging progress in the pace of core inflation over the past three months. “Give disinflation a chance,” he told Reuters. His remarks pulled rate hike odds back toward 50 percent, though most of that move reversed the following day when August payrolls rose by 162,000, nearly four times the 42,000 forecast.By the time the blackout began on Saturday, September 5, the committee’s divisions were clear. The hawks may push for a hike if Friday’s inflation data runs hot, while Waller appears willing to wait if price pressures continue to ease.
Why Does This Blackout Hit Differently?
For starters, it’s a projection meeting. Alongside its September 16 rate decision, the Fed will release an updated Summary of Economic Projections, including a fresh dot plot showing each official’s interest rate forecast. Traders won’t just find out whether the Fed holds or raises rates; they’ll also get a broader view of where policymakers think rates are headed.
Three members voted for a hike at the July meeting, and the September dot plot should reveal whether that hawkish faction has held steady, lost support, or gained momentum.
The decision is also genuinely up in the air. The Fed funds futures put the probability of a 25 basis point hike at roughly 57 percent by Friday’s close. That’s essentially a coin toss with a slight hawkish tilt. August payrolls rose by 162,000, far above the 42,000 forecast, and helped push those odds higher. That leaves Friday’s August CPI as the final major data point policymakers will receive before voting.
In a normal week, a surprising CPI report is often followed by a response from the Fed. An official may step in within hours to reinforce the hawkish interpretation, soften it, or remind markets that one report won’t determine the committee’s decision. That feedback loop can help keep traders from getting too far ahead of themselves. This week, it won’t exist. Whatever interpretation the market settles on after Friday’s report may stand largely unchallenged until September 16.
The August report also brings its own mixed signals. Headline CPI, lifted by higher oil prices, is expected to rise 0.4% m/m, which could strengthen the case for a hike. Core CPI, which strips out food and energy prices to provide a clearer view of underlying inflation, is expected to rise by a softer 0.2%, which could support holding rates steady.
The market will have to decide which number matters more, and there won’t be a Fed official available to settle the debate. Data released during blackout periods has historically produced more sustained moves than similar reports released outside the blackout.
With no official commentary to challenge the initial reaction, the Fed’s silence can make the signal sound even louder.
The Bottom Line
The blackout runs from September 5 through September 17. During that period, no Fed official can speak publicly about monetary policy or offer clues about the upcoming decision.
The Fed meets on September 15 and 16. Policymakers will announce their decision on Wednesday, September 16, alongside a fresh dot plot showing how many officials expect rates to rise above the current 3.50 percent to 3.75 percent target range. Chair Warsh will hold his press conference later that day.
August CPI on Friday (September 11, at 12:30 GMT) could define the week. It’s the final major inflation report before the Fed votes. Headline CPI is expected to rise 0.4%, partly because of higher oil prices, while core CPI is expected to increase by a softer 0.2 percent. Traders may latch onto one figure first, but the daily close will matter more than the initial spike.
The blackout could amplify the market’s reaction. With no Fed official available to reframe a surprise, the initial move may travel further before reversing. Friday’s daily close will likely set the market’s direction heading into the Fed decision.
What to Watch Next
Friday, September 11, at 12:30 GMT. The August CPI report takes center stage, with DXY, gold, USD/JPY, and EUR/USD among the key markets to watch.
Wednesday, September 16. The Fed releases its policy decision and updated dot plot before Chair Warsh holds his press conference. Markets will get both the rate decision and their first look at the Fed’s revised projections.
Thursday, September 17. The blackout ends, and Fed officials can begin speaking publicly again. That gives policymakers their first chance to address any market overreaction to the CPI report.
If the Fed’s blackout period or the mechanics of trading around a live rate decision are unfamiliar, Premium members can read our lesson:
📖 How to Trade Central Bank Decisions Using Market Expectations
Reading this helps you understand what “priced in” actually means, how to read market-implied hike probabilities, and how to prepare for each scenario when the Fed announces its decision.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what the data shows, but how the market is pricing central bank decisions and what each possible outcome means for your trades.
