What is the Federal Open Market Committee (FOMC)?

Overview of the Federal Open Market Committee (FOMC) - The FOMC is a crucial part of the Federal Reserve System, which is the central bank of the United States [2] - The committee is responsible for setting monetary policy to ensure economic stability, including maximum employment and stable prices [3] Monetary Policy Tools - The FOMC controls open market operations (OMOs), which involve the buying and selling of government securities to regulate the money supply [4] - The federal funds rate, influenced by the FOMC, is a key interest rate that affects borrowing costs and overall economic activity [5][6] FOMC Membership and Meetings - The FOMC consists of 12 members, including seven members from the Board of Governors and the president of the Federal Reserve Bank of New York, along with four rotating Reserve Bank presidents [7][8] - The committee meets eight times a year to discuss economic conditions and decide on monetary policy actions [13] Impact on the Economy - Changes in the federal funds rate directly affect interest rates on loans and credit cards, influencing borrowing costs for consumers and businesses [10] - The FOMC's decisions also impact inflation management, job stability, stock market performance, and home prices [11][12]