FOMC

The Federal Open Market Committee — the Federal Reserve body that sets US monetary policy by voting on the federal funds rate target at eight scheduled meetings per year.

The FOMC consists of twelve voting members: the seven Federal Reserve Board of Governors plus five of the twelve regional Federal Reserve Bank presidents on a rotating basis, with the New York Fed president holding a permanent voting seat. The committee meets eight times per year over two-day sessions.

At each meeting the FOMC reviews economic conditions and forecasts before voting on the federal funds rate target. The decision, the post-meeting statement, and the Chair's press conference are among the most market-moving events on the financial calendar. In March, June, September, and December the FOMC also releases the "Summary of Economic Projections" — the "dot plot" — showing each member's anonymous projection for GDP, unemployment, inflation, and the rate path.

Between scheduled meetings the FOMC can convene emergency sessions for dramatic events; it cut rates twice via emergency action at the start of the COVID pandemic in March 2020. Meeting minutes are released three weeks after each decision, providing detailed insight into the debate among members.

This definition is for informational and educational purposes only. Nothing on Finance Compass constitutes financial, investment, or trading advice. Always conduct your own research and consult a qualified professional before making financial decisions.