The Federal Open Market Committee is the Federal Reserve's rate-setting body, comprising the seven Board governors plus five of the twelve regional Reserve Bank presidents on a rotating basis. It sets the federal funds target range, directs open-market operations, and publishes the policy statement and economic projections that anchor global rate expectations.
How it works
The FOMC meets eight times a year, voting on the federal funds target range and the pace of balance-sheet runoff. Twelve members vote: the seven governors, the New York Fed president permanently, and four other regional presidents rotating annually. Decisions are communicated via the post-meeting statement, the quarterly Summary of Economic Projections (including the dot plot), and the Chair's press conference.
Why it matters now
With disinflation stalling near target and labour-market cooling giving cover for cuts, every 2025-2026 FOMC meeting is parsed for whether the easing path matches the dot plot or the market's terminal-rate pricing — the gap between the two drives front-end volatility.
Example
At its September 2024 meeting the FOMC cut the federal funds target range by 50 basis points to 4.75-5.00%, its first reduction of the cycle, with Governor Michelle Bowman dissenting in favour of a smaller 25bp move — the first governor dissent since 2005.
Frequently asked
- What is the FOMC?
- The FOMC is the Federal Reserve's monetary-policy committee that sets the federal funds target range and directs open-market operations. It comprises 12 voting members: the seven Board governors, the New York Fed president, and four of the remaining eleven regional Reserve Bank presidents rotating annually. It meets eight times a year and publishes a statement, projections, and dot plot.
- How is the FOMC different from the Federal Reserve Board?
- The FOMC is a 12-member voting committee for monetary policy, while the Board of Governors is the seven-member federal agency that oversees the Fed system. All seven governors sit on the FOMC, but the FOMC adds five rotating Reserve Bank presidents. The Board alone sets the discount rate and reserve requirements; the FOMC sets the federal funds target and balance-sheet policy.
- How many people vote on the FOMC?
- Twelve members vote on the FOMC at each meeting. These are the seven Board of Governors, the New York Fed president (a permanent voter), and four of the remaining eleven regional Reserve Bank presidents who rotate on a one-year cycle. All nineteen participants — including non-voting presidents — attend, discuss, and submit dot-plot projections.
- How often does the FOMC meet?
- The FOMC holds eight regularly scheduled meetings per year, roughly every six weeks, plus unscheduled meetings during crises. Four of the eight — March, June, September, and December — are accompanied by the Summary of Economic Projections and dot plot. The Chair holds a press conference after every meeting, a practice made universal in 2019.
- Why does every FOMC meeting move markets?
- FOMC meetings move markets because the committee sets the federal funds target range that anchors the entire dollar yield curve and global risk pricing. The post-meeting statement, projections, and Chair's press conference reveal the reaction function, so any gap between the dot plot and market terminal-rate pricing drives front-end rate volatility and repricing across asset classes.