Economy

FOMC (Federal Open Market Committee): Definition

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Simple Definition

The committee inside the Federal Reserve that sets U.S. interest-rate policy. It has 12 voting members and meets about 8 times a year; each meeting ends with a decision to raise, hold, or cut the benchmark rate.

Why It Matters

When the news says "the Fed met today," it means the FOMC. Its rate decision ripples into mortgages, credit cards, savings yields, bond prices, and stock valuations — which is why a single FOMC statement can move markets within seconds. Knowing it meets on a schedule (roughly every six weeks) helps you anticipate the calendar of market-moving events.

Key Points

  • 12 voting members; meets ~8 times a year on a published schedule.
  • Each meeting ends in a rate decision: raise, hold, or cut.
  • The post-meeting statement and press conference often move markets more than the decision itself.

Learn More

Foundation Lesson

How the Fed Sets Interest Rates

Get a complete explanation with examples, key takeaways, and a quiz to test your knowledge.

Related Terms

Common Questions

The committee inside the Federal Reserve that sets U.S. interest-rate policy. It has 12 voting members and meets about 8 times a year; each meeting ends with a decision to raise, hold, or cut the benchmark rate. When the news says "the Fed met today," it means the FOMC. Its rate decision ripples into mortgages, credit cards, savings yields, bond prices, and stock valuations — which is why a single FOMC statement can move markets within seconds.

When the news says "the Fed met today," it means the FOMC. Its rate decision ripples into mortgages, credit cards, savings yields, bond prices, and stock valuations — which is why a single FOMC statement can move markets within seconds. Knowing it meets on a schedule (roughly every six weeks) helps you anticipate the calendar of market-moving events.

12 voting members; meets ~8 times a year on a published schedule.

Each meeting ends in a rate decision: raise, hold, or cut.

The post-meeting statement and press conference often move markets more than the decision itself.