Federal Open Market Committee (FOMC)

The FOMC is arguably the single most market-watched committee on the planet. It sets the federal funds rate — the target interest rate at which U.S. banks lend money to each other overnight. Because the U.S. dollar is the world's dominant reserve currency and U.S. Treasuries are the benchmark for global borrowing costs, FOMC decisions ripple across every asset class, from bonds to currencies to crypto.

The committee has twelve voting members: the seven governors of the Federal Reserve Board, the president of the New York Fed (a permanent voter), and four of the remaining eleven regional Fed presidents on a rotating basis. All twelve regional presidents attend and speak at meetings, but only the designated four rotate into voting seats each year. This structure matters because market participants track which regional presidents are voting in a given year — some are known to be more hawkish or dovish than others.

After each meeting, the FOMC releases a policy statement and, at four of the eight annual meetings, a Summary of Economic Projections — nicknamed the dot plot because each official's rate forecast is shown as a dot on a chart. Traders typically dissect the dot plot for signals about the future path of rates. The Fed Chair then holds a press conference. All of these events are listed on the economic calendar, and understanding the broader role of the central bank provides useful context for interpreting FOMC outcomes.