Name: Olalekan Joseph
FEDERAL OPEN MARKET COMMITTEE (FOMC)
The Federal Open Market Committee (FOMC) is a vital component of the Federal Reserve System,
responsible for making key decisions regarding U.S. monetary policy. It consists of 12 members,
including seven members of the Board of Governors and five Reserve Bank presidents. The FOMC
meets regularly, typically eight times a year, to assess economic conditions and determine the
appropriate stance of monetary policy, such as setting interest rates or implementing quantitative
easing measures. The committee's decisions play a significant role in influencing inflation,
employment, and overall economic growth.
For traders, FOMC meetings are a time of particular volatility because any change in federal fund
rates can affect a range of economic variables such as short-term interest rates, foreign exchange
rates, long-term interest rates, employment output and prices of goods and services. The FOMC
meets eight times a year to discuss monetary policy changes, review economic and financial
conditions and assess price stability and employment output. These meetings take place every six
weeks. Four of these meetings feature a Summary of Economic Projections (SEP) followed with
a press conference by the chair. The minutes of the scheduled meetings are released three weeks
after the date of the policy decision.
Federal Open Market Committee members
Name POSITION
Jerome Powell Chair of the Federal Reserve Board
John Williams Vice-Chair of the Federal Reserve Board and President of the
Federal Reserve of New York
Thomas Barkin President of the Federal Reserve Bank of Richmond
Michael Barr Member of the Federal Reserve Board
Raphael Bostic President of the Federal Reserve Bank of Atlanta
Michelle Bowman Member of the Federal Reserve Board
Lisa Cook Member of the Federal Reserve Board
Mary Daly President of the Federal Reserve Bank of San Francisco
Beth Hammack President of the Federal Reserve Bank of Cleveland
Phillip Jefferson Member of the Federal Reserve Board
Adriana Kugler Member of the Federal Reserve Board
Christopher Waller Member of the Federal Reserve Board
Main Responsibilities of FOMC
1. Managing the money supply
2. Setting interest rates
3. Assessing economic and financial conditions
4. Evaluating risks
5. Voting on policy
FOMC meeting dates in 2025
1. January 28–29, 2025
2. March 18–19, 2025
3. May 6–7, 2025
4. June 17–18, 2025
5. July 29–30, 2025
6. September 16–17, 2025
7. October 28–29, 2025
8. December 9–10, 2025
How the FOMC impacts interest rates
1. Setting a target range for the federal funds rate, which is the interest rate banks use when
lending money to each other overnight.
2. Adjusting the money supply to move interest rates toward the target rate. Increasing the
money supply lowers interest rates, while decreasing the money supply raises interest rates.
3. Using monetary policy tools to implement the new target range such as interest on reserve
balances, the Overnight Reverse Repurchase Agreement Facility, and the discount rate.
How the FOMC affect the USD
1. Interest rate changes: The FOMC sets the federal funds rate, which is the interest rate at
which banks lend money to each other overnight. It can adjust this rate to influence
economic conditions.
2. Credit conditions: The FOMC's monetary policy actions can impact credit conditions,
which can affect financial conditions. This can include spending and investment decisions
by households, communities, and businesses.
3. Economic variables: Changes in the federal funds rate can affect a range of economic
variables, including employment, output, and prices of goods and services.
