FOMC

What is the FOMC?

The Federal Open Market Committee (FOMC) is the committee within the US Federal Reserve — the United States’ central bank — responsible for setting monetary policy, most visibly the benchmark federal funds interest rate. It meets on a fixed schedule several times a year to review economic conditions and decide whether to raise, cut, or hold rates.

What happens at an FOMC meeting

Each scheduled meeting typically produces:

• A rate decision, announced at a set time.
• A policy statement explaining the committee’s reasoning and outlook.
• On some meetings, updated economic projections from committee members, including their individual expectations for future rates (often referred to informally as the “dot plot”).
• A press conference from the Federal Reserve chair, where follow-up questions can reveal additional nuance beyond the written statement.

Several weeks after each meeting, detailed minutes are also published, giving markets a fuller picture of the discussion behind the decision.

Why FOMC meetings move markets

Because the US dollar is on one side of most heavily traded currency pairs, and the Federal Reserve is one of the world’s most influential central banks, FOMC decisions and commentary are among the highest-impact events for global forex, and often for gold, equities, and bonds as well. Markets react not only to the rate decision itself, but to the tone of the statement and press conference — a hold accompanied by hawkish language can move markets as much as an actual rate change, and vice versa for dovish language.

Why it matters to a trader

FOMC meeting dates are marked well in advance on the economic calendar, and volatility around the announcement and press conference can be sharp and fast-moving. Many traders treat FOMC days with extra caution — using smaller position sizes, wider stops, or simply staying flat through the release — given how quickly sentiment can shift as the statement and Q&A unfold.

Quick recap

• The FOMC is the Federal Reserve committee that sets US interest-rate policy.
• Meetings include a rate decision, statement, and often a press conference.
• Markets react to tone and guidance, not just the decision itself.
• FOMC days are among the highest-volatility events in global forex.