Fed Interest Rate Decision Today: Don’t Trade the News—Watch the Cycle Confirmations
- May 5
- 6 min read
It’s Fed day, and the headlines are already flying. Futures markets have priced in a 95.8% probability that the Federal Reserve will hold interest rates steady in today’s announcement, and the buzz around Chairman Powell’s upcoming comments is picking up speed.
But if you’ve been with us at Market Turning Points for any length of time, you already know what we’re going to say:
Don’t trade the news. Trade the structure. Trade the cycle.
While institutional desks and retail traders scramble to interpret Fed-speak and the nuances of the press conference, we’re focused on something far more consistent: cycle confirmations and price behavior. The market always reacts to news, but it’s the underlying structure that tells you what to do with that reaction.
Let’s look at what’s really important in today’s environment—and how smart traders are preparing for what comes next.
Fed Rate Pause and the Blackout Period: Just Noise?
The Fed officially entered its blackout period on April 26, which runs through today’s policy meeting. That means no FOMC members have commented on the economy since then. But heading into the silence, Powell and multiple officials made it clear: they’re on pause for now.
Why? They want to see how the economy absorbs recent tariffs before taking another step. That makes Powell’s tone at the press conference more important than the rate decision itself. If inflation continues to ease and the labor market shows more signs of cooling, the first rate cut could come later this summer.
Still, this is all speculation. And speculation is not a trading plan. Traders need discipline — not just data. The Fed’s tone can stir short-term volatility, but without confirmation in price structure, those reactions are fleeting. What happens in the price structure after the announcement is what matters.
Cycle Behavior Over Fed Headlines
We’re far more interested in the behavior of the market’s cycles than we are in the next soundbite. Here’s what the Visualizer projections are showing:
The intermediate cycle has been rising since early April.
It’s projected to peak between May 6–8, which aligns exactly with today’s Fed decision.
The long-term cycle has flattened, no longer steeply declining.
This isn’t a coincidence. Markets often pivot around major news—not because of the news itself, but because of the crowded positioning and cycle timing that exist under the surface. Markets are not driven by news—they're driven by reaction to news in context. That’s why structural positioning tells the real story.
Instead of trading the Fed, we’re watching the interaction between short-term price behavior and the projected intermediate cycle peak. If the market uses the Fed as a reason to extend the move, we’ll be ready. If it fades, we’ll be protected. Either way, structure leads.
What Cycle Confirmation Looks Like
When you’re trading with Steve’s methodology, you’re not guessing about reaction. You’re reading confirmation based on structure. Here’s how:
1. Crossover Averages
We’re watching the 2/3 and 3/5 crossover averages closely. These act as dynamic support for the intermediate trend. A clean hold above these averages—even on volatile Fed day price swings—tells us that institutional buyers are still defending the uptrend. A breakdown below them, however, signals something deeper is unfolding.
2. Momentum and Channel Behavior
As long as the market stays within the upper band of the 5- and 10-day price channels, it tells us short-term strength is still intact. But if price fails to break higher, or stalls just under a channel boundary, that can be an early warning sign. Momentum slowing near a cycle top is a classic red flag.
3. Volume and Breadth
A true continuation move needs broad participation. That means advancing volume should increase, and more stocks should be pushing above key moving averages. If we get a spike in the S&P but declining volume or weak internals, that’s a setup for failure.
4. Divergences Near the Peak
We’ve seen it before: the market grinds higher, even makes a marginal new high—but fewer and fewer stocks participate. That divergence is a classic sign of topping. Combine that with a cycle window and a loss of crossover support, and confirmation is clear.
Managing Exposure Around the Fed
We are currently in a valid intermediate uptrend that began with the April 3 and April 21 short-term lows. While we’re closer to the end of that trend than the beginning, the confirmation still holds. That means:
Stay long, but reduce size if you haven’t already.
Place tight stops under the 2/3 crossover average to protect open profits.
Be ready to act on any breakdown below structure, especially if it lines up with our projected topping window.
Fed days often create short-lived emotional swings. We don’t chase the move. We wait for price to confirm or reject structure, then act accordingly. The market’s first move is rarely the real move. Patience wins here.
Also, your tools matter. Having the right swing trading app configured to follow structural confirmations—like crossovers and channel breaks—can make all the difference in staying disciplined on news-heavy days like this.
Check our post on Swing Trading App Strategy: Aligning Tools with Intermediate Market Cycles for more info.
What Smart Traders Want to Know About the Fed Interest Rate Decision Today and Market Cycles
Why not just trade the Fed announcement?
Because by the time the Fed speaks, most of the positioning is already in place. Markets are forward-looking. If you trade based on the announcement alone, you’re trading into uncertainty—not structure. That’s a recipe for whipsaw. Smart traders use the news to observe confirmation, not to guess direction.
How does Powell’s tone affect cycle timing?
It doesn’t—unless price reacts in a way that confirms or breaks structure. We don’t care what Powell intends. We care what the market does in response. If it aligns with our topping window and violates structure, it matters. If not, it’s just noise. Tone may fuel sentiment, but structure tells the truth.
What does a “flattening long-term cycle” mean?
It means the downside momentum that carried through the first quarter is fading. That suggests a transition phase is underway. We may be moving from bearish to neutral or setting up for a bullish leg—but we don’t act until structure confirms. Flattening doesn’t mean reversal. It means pause.
Could today mark a top?
Yes. Based on our current projections, May 6–8 is the likely top window. But tops often take days to form. They rarely happen instantly on a headline. Instead, we’ll be looking for signs of exhaustion, divergence, and breakdown in key structure. If price holds, we stay long. If it breaks, we step aside.
What happens next if this is the top?
If price confirms a top with a breakdown below the crossover and short-term cycles turn lower, we’ll begin preparing for the next intermediate low, projected around May 30. That would set the stage for the next constructive rally into summer. But we don’t assume—we confirm.
Resolution to the Problem
The Fed will do what it does. But as traders, our edge comes from structure and timing—not from guessing what Powell will say. When you follow cycles, you’re not reacting to news. You’re interpreting it through the lens of price confirmation.
Whether the Fed cuts in June or waits until September is irrelevant unless the market’s response violates key structure. That’s what Steve’s strategy is all about—timing your trade with the rhythm of the market, not the noise.
At Market Turning Points, we stay focused on:
Cycle alignment
Price channel behavior
Crossover average support and breakdown zones
That’s how you stay grounded when the news cycle gets loud.
Join Market Turning Points
If you’re ready to stop chasing headlines and start trading with clarity, structure, and cycle-based confirmation, Market Turning Points is here to help. We offer:
Daily cycle forecasts based on Visualizer projections
Price structure overlays that identify key inflection zones
Tactical trade setups that focus on timing, not opinion
Conclusion
The Fed interest rate decision today may dominate financial headlines—but it won’t change the fact that cycle timing and structural confirmation always matter more.
We’re not here to predict what Powell says. We’re here to respond to how the market behaves in the face of uncertainty.
The topping window is in play. The uptrend is still valid—for now. But we’re watching confirmation, not commentary. That’s the discipline. That’s the structure.
That’s the Market Turning Points advantage.
Author, Steve Swanson
