FOMC (Federal Open Market Committee)
The FOMC is the Federal Reserve committee that sets US monetary policy, including the target range for the federal funds rate.
The Federal Open Market Committee has twelve voting members: the seven governors of the Federal Reserve Board, the president of the New York Fed and four of the other eleven regional Fed presidents, who vote on a rotating basis. Non-voting presidents also attend and take part in discussions.
The FOMC holds eight scheduled meetings per year and can meet in between if needed. After each meeting it releases a policy statement, and the Fed chair holds a press conference. Detailed minutes follow about three weeks later.
Four times a year, the committee publishes a Summary of Economic Projections, including the dot plot, which shows where each participant expects interest rates to go. Traders analyze every word of FOMC statements for hints about future policy, and markets can move sharply on the announcement.
Example: if the FOMC raises its target range by 0.25 percentage points, banks' borrowing costs rise and rates on credit cards and savings accounts typically follow.