#FOMCMeeting second report CME GROUP informs:

The Federal Reserve, also known as the Fed, is the central banking system of the United States and is responsible for guiding American monetary policy. Economic policy announcements and public statements from the Federal Reserve are among the most anticipated trading events of the year, as the implications for financial markets are so broad.

The Fed is responsible for buying and selling U.S. government securities in the financial markets and setting interest rates and reserve requirements. The Fed, by definition, has a dual mandate; Fed policymakers are expected to achieve stable prices and maximum employment. As a result, public statements made by the Fed and its governors are closely monitored by traders, as even the smallest changes in monetary policy and federal funds rates can trigger significant market-moving events.

The Federal Open Market Committee

The Federal Open Market Committee (FOMC) is composed of twelve members: the seven members of the Board of Governors of the Federal Reserve System, the president of the Federal Reserve Bank of New York, and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.

For traders, FOMC meetings are a time of particular volatility because any change in federal funds rates can affect a range of economic variables, such as short-term interest rates, exchange rates, long-term interest rates, employment, output, and prices of goods and services.

The FOMC meets eight times a year to discuss changes in monetary policy, analyze economic and financial conditions, and assess price stability and employment. These meetings occur every six weeks. Four of these meetings include an Economic Projections Summary (SEP), followed by a press conference from the president.