What it is
The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve System that determines the direction of monetary policy in the United States. It consists of 12 members: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York (FRBNY), and presidents of four other Federal Reserve Banks on a rotating basis. The FOMC meets eight times a year to assess economic and financial conditions and vote on policy actions.
The FOMC's decisions, particularly on the target range for the federal funds rate, directly influence interest rates across the economy. After each meeting, the committee issues a statement explaining its policy decision, which is meticulously analyzed by investors for signals about future rate hikes or cuts. The "dot plot" and "Summary of Economic Projections" released quarterly provide further insight into individual members' economic forecasts and rate expectations.
Why it matters
FOMC decisions on interest rates impact your borrowing costs, investment returns, and the overall economic environment. Pay attention to their statements.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice