The Federal Open Market Committee, the policy-making body of the Federal Reserve that sets the federal funds rate target and directs open market operations, meeting 8 times per year.
What Is the FOMC?
The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve responsible for setting US monetary policy. It consists of 12 voting members: the 7 Board of Governors members, the president of the New York Fed, and 4 of the remaining 11 regional Fed presidents on a rotating basis. The FOMC meets 8 scheduled times per year, with the ability to call emergency meetings when needed.
FOMC Events That Move Forex
Each FOMC meeting produces a rate decision and policy statement (2:00 PM ET), followed by a press conference by the Fed Chair (2:30 PM ET). The statement language, particularly changes from the previous meeting, moves EUR/USD, USD/JPY, and all dollar pairs within seconds. The quarterly "dot plot" (Summary of Economic Projections) shows each member's Interest Rate forecast and is closely analyzed for Hawkish or Dovish shifts.
FOMC Meeting Minutes
Three weeks after each meeting, the FOMC releases detailed minutes revealing the depth of debate. These minutes can move markets if they reveal more dissent or stronger views than the initial statement suggested. For traders, the FOMC calendar is the most important schedule to track. The Best Time to Trade Forex explains how to prepare for FOMC-driven volatility within the broader trading session framework.
Related Terms
Federal Reserve
The central bank of the United States, commonly called the Fed, responsible for setting US monetary policy through the FOMC. It manages the US dollar, the world's primary reserve currency.
Interest Rate
The cost of borrowing money, set by central banks as a primary monetary policy tool. Interest rate differentials between countries are the dominant driver of forex exchange rates.
Hawkish
Describing a central bank stance or official's tone that favors higher interest rates, tighter monetary policy, and prioritizing inflation control over economic growth stimulation.
Dovish
Describing a central bank stance or official's tone that favors lower interest rates, looser monetary policy, and prioritizing economic growth and employment over inflation concerns.
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