Federal Open Market Committee
The Federal Open Market Committee (FOMC) is the monetary policy-making body of the Federal Reserve System, responsible for setting the target federal funds rate and overseeing open market operations, and it meets eight times per year to assess economic conditions and adjust policy accordingly.
The FOMC consists of twelve voting members: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York (a permanent voting member), and four of the remaining eleven Reserve Bank presidents, who rotate annually. All twelve Reserve Bank presidents attend and participate in discussions; only five vote at any given time. The Chair of the Board of Governors — currently Jerome Powell as of 2024 — chairs the FOMC and is the primary spokesperson for U.S. monetary policy.
Each FOMC meeting spans two days and culminates in a policy statement released at 2:00 p.m. Eastern Time on the second day. The statement includes the rate decision, a characterization of economic and financial conditions, and often forward guidance about the likely path of policy. Approximately 30 minutes later, the Chair holds a press conference — added as a regular practice in 2019 — that provides additional context and takes media questions. The detailed meeting minutes are released three weeks after each meeting, and the 'Summary of Economic Projections' (SEP), including the famous 'dot plot' showing each member's rate forecast, is published four times per year.
The dot plot became one of the most scrutinized documents in finance. During 2022–2023, the trajectory of dots — showing FOMC members' projections for the 'terminal rate' (the peak of the hiking cycle) — moved dramatically higher with each meeting, from under 1% at the start of 2022 to 5.25%–5.50% by mid-2023. Markets moved sharply with every upward revision, as higher terminal rate expectations repriced bonds, compressed equity valuations, and strengthened the U.S. dollar.
For active traders and long-term investors alike, FOMC meeting days are among the highest-volatility events of the year. Positioning heading into the meeting, the initial market reaction to the statement, and the press conference's nuances can trigger multiple directional reversals in a single afternoon, testing even the most disciplined risk-management frameworks.