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Federal Open Market Committee (FOMC)
1933; current form 1935· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
The Fed's 12-member committee that sets the target for short-term interest rates and directs bond buying and selling.
See it on the Money & Finance map →How it works
It has 12 voters: the seven Board governors, the New York Fed president, and four of the other 11 regional presidents, rotating yearly; all 12 presidents join the debate. It meets eight times a year, announces decisions at 2 p.m. Eastern, and the chair then holds a press conference. Four times a year members publish economic forecasts, including the 'dot plot' showing where each expects rates to go.
Why it matters
Its votes ripple through Treasury yields, mortgage and loan rates, cap rates and stock valuations, so markets parse every word of its statements.
Facts, rules and data
Statements, minutes three weeks after each meeting and full transcripts after five years are published on federalreserve.gov; the Banking Acts of 1933 and 1935 set its structure.
Debates and risks
Whether forward guidance and the dot plot help markets or lock the Fed in is debated; Kevin Warsh has been a prominent critic of forward guidance.
Connections (3)
▸The Federal Reserve System (the Fed) sets policy through Federal Open Market Committee (FOMC)Fact, law or data
The connection
The Fed's most important decision, the level of short-term interest rates, is made by the FOMC rather than the Board alone. The committee votes on a target range, then instructs the New York Fed's trading desk to use its tools so market rates stay inside it.
When and why
Created by the Banking Acts of 1933 and 1935; meets in Washington eight times a year, more often in emergencies.
How we know
Each FOMC statement lists members' votes, and an accompanying directive instructs the New York Fed desk; minutes follow three weeks later.
Debates and risks
Whether regional bank presidents, chosen by their banks' boards rather than by elected officials, should vote on national policy is periodically challenged in Congress.
▸Federal Open Market Committee (FOMC) sets the target range for The federal funds rateFact, law or data
The connection
Fed funds is the rate banks charge each other for overnight loans of reserves. The FOMC sets a target range a quarter point wide, such as 3.50–3.75% in December 2025, and keeps the market rate inside it mainly through interest on reserves. Other short rates, from T-bills to prime-based loans, then follow.
When and why
Decisions announced publicly since 1994 and set as ranges since December 2008; voted on at each of the FOMC's eight yearly meetings.
How we know
The New York Fed publishes the effective federal funds rate daily; it has stayed inside the target range on almost every day.
Debates and risks
As interbank lending shrank after 2008 the fed funds market became thin; some argue a broader repo rate such as SOFR should become the target.
▸Jerome Powell, Fed chair 2018–2026 chaired Federal Open Market Committee (FOMC)Fact, law or data
The connection
As Fed chair, Powell also chaired the FOMC, setting its agenda, building consensus and explaining decisions at a press conference after every meeting, a practice he began in 2019. He led it from zero rates in 2020 through 11 hikes in 2022–23 and cuts in 2024–25.
When and why
FOMC meetings in Washington, February 2018 to May 2026; by tradition the committee elects the Fed chair as its own chair.
How we know
FOMC statements list him as chair and record each vote; dissents, rare for most of his tenure, rose in 2025.
Debates and risks
Whether his consensus-building style muted useful disagreement, and whether rising dissents signaled a more divided committee ahead, are open questions.