FOMC
The Federal Open Market Committee — the Fed body that sets U.S. monetary policy, meeting eight times per year to vote on the federal funds rate target.
The Federal Open Market Committee (FOMC) is the 12-member policy-setting body of the Federal Reserve. It consists of the seven members of the Board of Governors plus five of the twelve Federal Reserve Bank presidents (NY Fed president votes permanently; others rotate).
The FOMC meets eight times per year and votes on the federal funds rate target range. Decisions, the policy statement, and the Summary of Economic Projections ("dot plot") are released at 2:00 PM ET. The Chair's press conference follows at 2:30 PM.
FOMC days are among the highest-volatility sessions of the year. Markets parse every word of the statement and the dot plot — a shift of even two dots can reprice the entire yield curve. For active traders, positioning ahead of FOMC decisions and managing event risk is a core skill.
Related Terms
CME FedWatch
A CME tool that converts 30-day Fed Funds futures prices into market-implied probabilities of Fed rate moves at upcoming FOMC meetings.
IntermediateDiscount Rate
The interest rate the Federal Reserve charges commercial banks for direct short-term borrowing from the Fed's discount window.
IntermediateDovish
A monetary policy stance favouring lower interest rates and easier financial conditions to support growth and employment — the opposite of hawkish.
IntermediateFederal Funds Rate
The overnight interest rate at which U.S. banks lend reserve balances to each other — the primary policy rate the Fed targets to steer the economy.
IntermediateFederal Reserve
The U.S. central bank — its rate decisions and forward guidance move global markets more than any other single institution.
BeginnerHawkish
A monetary policy stance favouring higher interest rates and tighter financial conditions to combat inflation — the opposite of dovish.
IntermediateIORB
The rate the Fed pays banks on reserves held at the Fed — its primary administered tool for steering the fed funds rate within target.
AdvancedNon-Farm Payrolls (NFP)
Monthly count of new U.S. jobs added outside the farm sector — the most volatility-generating data release on the macro calendar.
BeginnerQuantitative Easing
A Fed policy of purchasing Treasury bonds and MBS to inject liquidity, lower long-term yields, and stimulate the economy when short rates are near zero.
IntermediateQuantitative Tightening
The Fed's policy of shrinking its balance sheet by allowing bonds to mature without reinvesting the proceeds — the reverse of QE.
AdvancedSOFR
Secured Overnight Financing Rate — the benchmark short-term interest rate based on actual overnight Treasury repo transactions, replacing LIBOR.
Advanced