Federal Open Market CommitteeFOMC
The Federal Open Market Committee (FOMC) is the Federal Reserve body that votes on US interest rates at scheduled meetings throughout the year.
When people say “the Fed decided”, they usually mean the FOMC. This committee meets eight times a year on a published schedule and votes on the target range for the federal funds rate and other policy settings.1 Each meeting produces a statement, often a press conference, and later the minutes — each of which can move markets. This entry explains who sits on the FOMC, what a meeting produces, and how to trade around it.
- Category
- Fundamentals and Macroeconomics
- Reading time
- 4 min
- Also called
- Fed meeting, Fed decision, FOMC meeting
- Updated
The FOMC in plain words
The FOMC is the group inside the Federal Reserve that sets US interest-rate policy. See Federal Reserve and Interest Rate.
Its decisions arrive at a set time on meeting days. Markets react to the decision, the wording of the statement, officials’ projections and the chair’s press conference.
How an FOMC meeting unfolds for traders, step by step
Before
Check the calendar and what futures markets price in. See Economic Calendar.
Statement
The decision and a short statement are released at a set time.
Projections
At some meetings, officials publish projections, including the “dot plot” of expected rates.
Press conference
The chair answers questions shortly after the statement.
Minutes
Detailed minutes come about three weeks later and can move markets again.2
Speeches
Members’ speeches between meetings shift expectations.
Worked examples
Example 1 — The dot plot shift
ProjectionsRates are unchanged, but the median projection now shows two cuts next year instead of three.
| Decision | As expected |
| Projections | Fewer cuts |
| Bond yields | Rise |
Projections can move markets even when the decision does not surprise.
Example 2 — Two-stage reaction
WhipsawThe dollar rises on the statement, then reverses during the press conference.
| First move | Up |
| Second move | Down |
FOMC days often have more than one reaction. Wide stops or smaller size help.
Example 3 — Dissent
VotesThe committee cuts rates, but three members vote against.
| Signal | Further cuts less certain |
Votes and dissents reveal how united the committee is.
What each FOMC release tells you
| Aspect | Timing | Content |
|---|---|---|
| Statement | Meeting day | Decision and policy view |
| Projections | Some meeting days | Officials’ forecasts and dot plot |
| Press conference | Shortly after the statement | Chair’s explanation and answers |
| Minutes | About three weeks later | Detail of the discussion |
Why traders follow the FOMC
Event risk
One of the most volatile scheduled events. See Volatility.
Rate expectations
Drives bonds and the dollar. See Treasury Bills, Notes and Bonds.
Risk appetite
Policy direction affects stocks and crypto.
Planning
Adjusting size and stops before decisions.
Advantages and disadvantages
Advantages
- Fixed, public schedule.
- Multiple documents explain the reasoning.
- Expectations are visible in market prices.
Disadvantages
- Fast, two-way moves on the day.
- Wording can be interpreted differently.
- Projections change with data.
- Spreads widen around the release.
Going deeper
Read as far as you need. Each level builds on the one before it.
Who votes
Beginner
The FOMC has twelve voting members: the seven Board governors, the president of the New York Fed and four other regional Fed presidents who rotate.
Reading statement changes
Intermediate
Traders compare each statement word by word with the previous one. A small change in wording can signal a shift in policy.
Market-implied path
Advanced
Futures on the federal funds rate imply a path of expected rates. Comparing it with the dot plot shows where markets and officials disagree.
Common mistakes
Trading the first second
Spreads are wide and reversals common.
Ignoring the press conference
It can reverse the first reaction.
Treating the dot plot as a promise
It is a set of opinions.
Forgetting the minutes
They can move markets weeks later.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- The FOMC sets US interest-rate policy.
- It meets eight times a year on a published schedule.
- Statement, projections, press conference and minutes all matter.
- Reactions can reverse within the same day.
- Compare outcomes with what markets priced in.
Frequently asked questions
How often does the FOMC meet?
What time are FOMC decisions released?
Should I trade during FOMC announcements?
Further learning
- Federal Reserve
The institution behind the FOMC.
- Interest Rate
What the FOMC decides.
- Consumer Price Index
Data that shapes FOMC decisions.
- Volatility
What decision days do to prices.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- Federal Reserve Board. Federal Open Market Committee (opens in a new tab) Checked .
- Federal Reserve Board. Meeting calendars and information (FOMC) (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.