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The reason why I can read Fed statements and can understand them is because of the combination of the following.  (This includes the story of how I got to the point of reading Fed statements in the first place.) 

The reason why I started reading Fed statements and the reasons why I can successfully read them are stated below and identified with bold headers, but they are part of the larger story told on this page. 

I started studying economics and finance in the mid-1970's - I started studying the financial markets, investments, and to some cursory extent, economics.  I then decided to also study economics in college (even though it was not my major - my major was electronics engineering; I had to study engineering economics for my degree, and that was offered by the Economics Department, so I decided to do the rest of my Social Sciences credits there, as well, in part because I wanted to get a more specific understanding of things than my parents, who never got the chance to go to college, had). 

What I was studying made sense to me (some right away, some eventually, thankfully in time for the test each time!) - but then when I started trying to apply some of it, parts that could be applied in everyday life, after I graduated from college, I found that in some cases, I got complete nonsense results or at least not results that were consistent with what I had learned in college should be happening. 

That greatly confused me - why weren't things matching up, what was wrong? 

In the mid-1980's, I started getting "junk" mail with a "Dear Professional" salutation on it (obviously the system had taken note of the fact that I had an electronics engineering degree, and had maybe even figured out that I was working in the meantime). 

Some of that "junk" mail talked about the Kondratieff wave and Austrian economics - and claimed that it could make sense of everything that had been going on and was going on using those two things.  I started looking into it - and the scales started falling from my eyes. 

That happened for more than one reason.  One was that the Kondratieff wave actually predicted the recession of the early 1980's that had caught me so totally by surprise (and forced me to change all my plans).  Another was that I started realizing that Austrian economics is much simpler and more straightforward than the economics that I had been taught in college, but seemed to have a better handle on the big picture.  (I later realized that Keynesian economics, which is what I studied in college, spends all of its effort on ways to avoid and minimize recessions - and I learned a lot about that - but does not devote any effort to figuring out why the recessions happen in the first place.)  Another was that it was explaining, easily, the things that were confusing me on a day-to-day basis at the time. 

So I decided to pursue it - and the more I learned, the more clarity I got. 

Eventually, I realized that economics really could be a lot simpler than what I had been taught in college - and that much simpler version actually explained things better at the day-to-day level, as well (there was nothing about what was going on day-to-day that was confusing to me in the context of Austrian economics). 

I continued to pursue it - with the one caveat that Kondratieff wave books of the time did predict a major depression for the 1990's (based on the timing of how the current Kondratieff wave had played itself out up to that time) and other sources were predicting (on a very credible basis relative to themselves, as far as I was concerned) more positive situations, all the way to predictions of a major boom in the 1990's.  I did not know who to believe - and did not really want to accept that a major depression was coming soon because I had just started my career. 

Well, as we all know in the meantime, a major boom did occur in the 1990's (in other words, the most positive prognosticators in the 1980's were right) - but that still left me wondering what went wrong with the Kondratieff wave, since it had been so accurate in predicting major events in the past along the way, not just the recession of the early 1980's.  I decided that if it had been accurate for so long before, there had to be a reason why it had suddenly failed in the big picture.  I had learned a lot of details about the Kondratieff wave in the meantime, so I decided to try to think about it to see if I could figure out what the problem was. 

As it turned out, I had to undo all of what I learned in college and learn to think entirely in terms of the Kondratieff wave before I could figure it out, and also had to learn most of the details of the Kondratieff wave before I could finally figure it out.  I thought about it a lot, and then I finally realized, sometime in the mid- to late-1990's (I don't remember exactly when anymore), that the key is that during the growth phase of the Kondratieff wave, additional money goes into consumer prices, but during the plateau phase of the Kondratieff wave, additional money goes (at least mostly) into the stock market.  So what was happening was that the additional new money, more and more of it at an ever-increasing rate, was going into the stock market, thus driving the stock market up faster and faster to levels that would never have even been possible without that, and that was creating a "virtuous circle" whereby the circumstance was making people feel richer (consumer prices going up is regarded as a bad thing, but the stock market going up, i.e., stock prices going up, is regarded as a good thing), so people were spending more (often, even typically, on credit) and that was keeping the economy, which is 2/3 dependent on consumer spending in normal times, going.  (I read reports after the late 1990's that said that from about 1997-1999, the American economy was actually dependent on consumer spending to about a level of 90%, not 2/3 - and that makes sense to me, it sounds about right - after all, many people were saying in the late 1990's, "We have the best of times, let's keep it going!".) 

(Note - the situation has continued to be extended even beyond the year 2000, but not because the plateau phase was extended more, it wasn't.  We have been in the depression phase of the current Kondratieff wave since 2000 - just that when we got to 2000, when the law against recessions actually expired, the authorities in the system at that time decided that they liked the results of the enforcement of the law against recessions up to that point so much that they decided to just keep enforcing it as if it had never expired.  That is what they have done - and they did manage to keep the economy going through the major, and anticipated by me, stock market downturn of the early 2000's, but because we are dealing with such a mature economic situation in the meantime and really should have been in a depression for several years already, even just based on having come out of a stock market exponential in the late 1990's, the authorities were never able to get strong growth out of the economy in the 2000's for any length of time and the positive growth they did get was driven largely by ever-more-record government deficit spending.) 

I knew the situation could not last indefinitely and I saw big trouble brewing when I saw the stock market go exponential in the late 1990's (because I know that no exponential can end well - the exponential part of the curve, i.e., the vertical part, uses up the positivity that would be needed to keep the system operating normally afterward.) 

So I prepared for the worst, having realized in the meantime that all the government did with all the money-pumping was to postpone the inevitable. 

But then the inevitable did not come - the stock market came down a lot, as I predicted it would, but the economy did not go down with it. 

In fact, what happened was that the people kept right on spending - and complained to the Federal Reserve that the stock market was going down (to which the Fed chairman at the time, Alan Greenspan, replied, "The job of the Fed is to keep the economy going, not to keep the stock market going up - it is not the job of the Fed to provide automatic profits to speculators," to which I thought, "Isn't it interesting that Greenspan is, in effect, calling ordinary Americans speculators, even though all most of them are doing is regarding the stock market as an automatic savings account in the meantime because the stock market has been going up, overall, for so long, for so many years already, that they do not expect the stock market to go down a lot anymore and cannot imagine that it would do so?"). 

When the stock market had been going down for nearly a year, i.e., early 2000 to late 2000, and the economic statistics were finally starting to go down because people were finally reacting to that, Greenspan acted.  The final reports that gave him pause came out during the holidays of 2000, when he could not really act effectively, but he did act in early 2001 (on January 3rd, as I recall).  He lowered interest rates - and that started injecting confidence back into the system, people started saying "He is doing something after all." 

But it did not help much - the economy was so weak in the meantime, I think both because it had been allowed to go down for a year and because it was so weak, overall, in the meantime, from having been pushed over the years so far beyond where it would have started going down in past Kondratieff waves (it had been pushed on for over a decade in the meantime, close to 15 years), that one interest rate just did not cut it anymore (not even close), although it had done so in the past.  Within a month, it was clear to Greenspan that things were not holding up well enough - and so he cut interest rates again. 

Still not enough - so he did it again a month later.  Again, not enough, so he did it again - and then again and then again, always about a month later (and the stock market was just going sideways the whole time, it was so weak in the meantime). 

At that point, in the summer of 2001, I was really beginning to wonder what was going on, why was he pushing so hard even in the wake of a stock market exponential?

So I decided to try to find out. 

The reason why I started reading Fed statements - 

By then the internet had been commonly available for long enough that I thought maybe the Fed might have a website in the meantime.  They did - and, in fact, had a sign-up for free e-mail notifications of Fed announcements, speeches. and testimony (in the case of testimony, it was testimony before Congress, as it turns out).  The website did not tell me much that I wanted to know, so I figured my only chance would be to try to glean something from stuff that I would find out about by way of the free e-mails.  So I signed up for them. 

It did not take me long after that to get my answer - because of the timing of when I signed up for the e-mails.  Soon after I did that, as I recall only days later, I got a notification about the semi-annual report to Congress on the state of the economy.  I clicked on that and the first thing I saw at the top of the prepared testimony was a title that said semi-annual report to Congress on the state of the economy, formerly known as the Humphrey-Hawkins testimony.  I wondered what was meant by Humphrey-Hawkins - so I did a search on that. 

I had my answer within two minutes after I found out about the Humphrey-Hawkins reference - and it took only two sentences in the reference to get my answer.  The Humphrey-Hawkins legislation, passed in 1978 (in other words, in the wake of the recession of the earlier 1970's), mandates full employment at low inflation and tasks the Federal Reserve with making that happen.  The law actually expired in 2000 (before I even knew about it), but I found out (from other references that I saw at the time) that the government and the Fed had decided that they liked the results of the enforcement of it so far to that point so much that they decided to just keep enforcing it as if nothing had changed, and that is why the testimony was no longer called the Humphrey-Hawkins testimony by the time I saw it for the first time.  That was about the only thing they had to change when the law expired - the name of the semi-annual report to Congress (which is the means by which the Fed chairman tells the Congress how well the Fed is doing to meet its mandate from Congress). 

I have been getting Fed e-mails ever since.  I do not read everything - in fact, I do not read even half of it (much of it is very technical and esoteric or just plain routine announcements) - but I do read all the major speeches, all major testimony, and all Fed statements following FOMC meetings (those statements are much shorter anyway than most speeches and testimony to Congress). 

I should probably note that in Greenspan's day, the reports were a lot more cryptically worded, even in general, than they are since Bernanke took over, for two reasons.  (I got a few years of Greenspan-era Fed e-mails before Bernanke became chairman.)  One reason is simply that Greenspan had a more ponderous way of speaking in general than Bernanke does.  But it turned out that another reason was that Greenspan was still pretty much of the old school of putting a halo of exclusivity and privacy around the Federal Reserve, trying to keep it in its own little world.  In other words, I eventually found out that at times, he was intentionally vague and/or cryptic.  Bernanke is much less so - and he even stated, when he became Fed chairman, that he intended to make the Federal Reserve more open, and he has done so.  But that does not change the fact that the Fed is still considered by Congress to have a dual mandate of full employment at low inflation (it is the only central bank in the world that does - all other central banks have only a mandate for low inflation, in those countries it is regarded as the job of the government to ensure conditions for full employment, but in the United States, the Congress has abdicated the entire responsibility for that to the Federal Reserve), so if the Fed chairman deems it necessary to be cryptic in order to further the goal of full employment at low inflation (which is impossible during a deflationary depression - that is about the worst economic conditions possible, so he wants to make sure he does everything he can to make sure people do not think in terms of deflation or depression), he words the Fed output in a cryptic (or at least indirect) manner. 

The actual reasons why I can read Fed statements -

I have had plenty of practice in reading Fed output in the meantime - and I believe that the reason why I can read and interpret it so successfully in the meantime is because of a combination of the following factors.  I came to the English language as a foreigner (I grew up with German), but eventually learned both English and German to an advanced level.  That helps.  Moreover, I had learned all about both Keynesian and Austrian economics (see above), and the differences between them, before I started getting the Fed e-mails - and I know that the vast majority of economists, including ALL of the ones at the Fed, are Keynesians, so when I read the stuff from the Fed, I knew it was in a Keynesian context and could interpret it accordingly.  I have been doing so ever since - and still do, successfully. 

But I also long-since in the meantime know the limitations of Keynesian economics - so I know what the Fed statements mean in the actual context of circumstances, I know what of what they say is realistic and what isn't, in particular what is implementable and what isn't, and how far those things are implementable and what the consequences will be if they try.  In other words, I know what will actually happen in the context of what the Fed is trying to do.  That is why I have been so successful at predicting both the ups and the downs for so long - and that, at least in part, is what this website is all about. 

The problem is that the ups have been all used up in the meantime - and so now we are headed down in a big way (in the big picture - people still feel the tail-end of a bounce these days).