Every now and then, the market acts like it knows a secret.
For about two decades—starting in the mid-1990s—there was a strange and consistent pattern in the stock market: the S&P 500 would quietly rise in the 24 hours before a scheduled Fed announcement. Not after. Before. And not by a little—enough that, over time, researchers found this window accounted for a huge chunk of total market returns.
It was called the pre-FOMC announcement drift, and for a while, it felt like one of the market’s worst-kept secrets.
Some chalked it up to investor optimism. Others suspected informed trading. A few theorized it was a behavioral quirk—a market-wide version of people dressing up when they know company’s coming. Either way, it was real. And it was profitable.
If you had only invested during the pre-Fed windows from 1994 to the early 2010s, you’d have done astonishingly well.
So… what happened?
In the last decade, that pattern has faded. Not completely, but enough to raise some interesting questions. And like most things in finance, the reasons aren’t just about math—they’re about people.
First, the Fed got better at talking. Around 2011, they started holding regular press conferences. Their language became more predictable, more transparent. Investors weren’t left squinting at tea leaves or briefcases (yes, really) to guess what might happen. The mystery drained out of it.
Second, the market got faster. Algorithmic trading made it harder to profit from slow, obvious patterns. You could no longer tiptoe into the market before a Fed meeting and expect the same boost. The opportunity got arbitraged away.
Third—and maybe most importantly—investors got more sophisticated. They stopped reacting to the Fed’s actions and started focusing on the why. Was this a rate cut out of panic, or prudence? Was this a pause that signaled patience, or concern? The nuance started to matter more than the headline.
Which is why the pre-FOMC drift, as strong as it once was, now feels more like a curiosity than a strategy.
And honestly, I think there’s something comforting about that.
Because it reminds us that markets evolve. Patterns don’t last forever. And the greatest strategy isn’t chasing every whisper of an edge—it’s building something that can hold steady while the world spins.
So yes, the market once had a secret.
But as it turns out, the real secret was just this:
Stay focused. Stay grounded. Don’t let the Fed (or anyone else) pull you off course.
More soon,
Lauren
The most important thing in my life is my family. My husband, Andrew, and our three smart and brave daughters.