What is the Federal Open Market Committee (FOMC) Meeting?

The Federal Open Market Committee (FOMC Meeting) is a regular meeting held by the U.S. Federal Reserve to discuss the monetary policy of the United States and make pivotal decisions regarding interest rates.

Number of meetings:

It is held eight times a year, and additional meetings can be held if necessary.

Participants:

Members of the Open Market Committee attend, including the Chair of the Federal Reserve, Vice Chairs, and some Presidents of regional Federal Reserve banks.

Objectives of the meeting:

Analyze domestic and external economic conditions such as:

Inflation.

Economic growth.

Unemployment rate.

Financial stability.

Make decisions regarding:

The federal funds rate (the interest rate on federal funds).

Asset purchase or sale programs (quantitative easing or tightening).

Importance of the meeting:

Investors closely watch this meeting due to its direct impact on:

Financial markets (stock and bond markets).

Currency prices (especially the U.S. dollar).

Gold and oil prices.

After the meeting:

An official statement is issued in which the Federal Reserve explains its decisions and assessment of the economic situation.

This is usually followed by a press conference from the Chair of the Federal Reserve, where future monetary policy directions are explained, providing more clarity to the markets or causing volatility.