Federal Open Market Committee (FOMC)?
The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve System (FRS) that determines the direction of monetary policy specifically by directing open market operations (OMO). The committee is made up of twelve members: the chairman, seven governors from the FRB appointed by Congress, and four regional fed presidents.
When it is reported in the news that the Fed has changed interest rates, it is the result of the FOMC's regular meetings.
KEY TAKEAWAYS
The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve System that determines the direction of monetary policy specifically by directing open market operations.
The FOMC is composed of the board of governors, which has seven members, and five Federal Reserve Bank presidents.
The Committee has eight regularly scheduled "secret" meetings each year that are the subject of much speculation on Wall Street.
FOMC Meetings
The Federal Open Market Committee (FOMC) has eight regularly scheduled meetings each year, but they can meet more often if the need should arise.1 The meetings are held in secret, and therefore, are the subject of much speculation on Wall Street, as analysts attempt to predict whether the Fed will tighten or loosen the money supply with a resulting rise or fall in interest rates. In recent years, FOMC meeting minutes have been made public following the meetings.
During the meeting, members discuss developments in the local and global financial markets, as well as economic and financialf forecastorecast. All participants – Board of Governors and all twelve Reserve Bank presidents – share their views on the country’s economic stance and converse on the monetary policy that would be most beneficial for the country. After much deliberation by all participants, only designated FOMC members get to vote on a policy that they consider appropriate for the period.
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