On the eve of a rate decision, the market is already largely in agreement that rates will stay put—and that consensus itself is a risk. For example, once the implied probability of “no change” in interest rate futures gets pushed above 90%, people stop focusing on whether rates will be cut and start watching for changes to a few words in the press conference: Has “inflation remains elevated” become “inflation has made progress”? Has “data dependence” been supplemented with “additional tightening”? Has the description of the path ahead changed from “cautious” to “flexible”? These seemingly minor word choices often trigger the first wave of market moves more than the decision itself. If there is a surprise, it’s often not the outcome but the tone.

My usual approach still applies: keep positions small before the announcement—say, one-third to half of the size I’d normally plan for—and wait to see the initial reaction after the news comes out. If the market spikes up and then sells off, that’s probably a bull trap, so don’t chase it. A sharp, high-volume breakout near a previous high that falls back into the range within minutes is especially common on rate-decision nights. A move that wicks through stop-losses and immediately rebounds is also particularly common—that’s a classic liquidity hunt: stops on both sides of a key level get swept first, then the price quickly snaps back. So don’t place stops too close. Ideally, put them beyond key levels and leave some room based on volatility. Scale in: use the first entry to test the waters, and only make the second move after confirmation. Don’t let a single wick shake you out.

When all the positioning is one-sided going into the announcement, volatility in the first hour afterward is more likely to be misleading. Survive first; worry about direction later. So what’s the takeaway? I haven’t quite figured that out yet either.