#FOMCMeeting

WHAT IS THE IMPORTANCE OF THE U.S. FEDERAL RESERVE'S MONETARY POLICY MEETING?

With a set regularity, the central bank of a nation holds economic policy meetings in which the members of the Board take various measures, the most relevant of which is the interest rate it will charge on loans and advances to commercial banks.

In the U.S., the Board of Governors of the Federal Reserve meets at intervals of between 5 and 8 weeks and announces its latest decisions.

A rate hike tends to stimulate the local currency, the dollar, as it is seen as a sign of healthy inflation. A rate cut, on the other hand, is viewed as an economic negative and therefore tends to weaken the local currency.

If the rate remains unchanged, the attention of the markets and the media focuses on the statement from the Federal Open Market Committee (FOMC) to detect whether the tone regarding the future of inflation is aggressive or moderate.