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FOMC Cheat Sheet

What is the FOMC?

FOMC stands for Federal Open Market Committee, a branch of the Federal Reserve System

Who is on the committee?

- President of the Federal Reserve Bank of New York
- 7 members of the Board of Governors
- 4 Reserve Bank Presidents on a rotating basis

Why do they meet?

The members meet to discuss national and global economic developments and their stance on monetary policies

When are the meetings held?

FOMC meets 8 times per year, every 6 weeks. They can meet more often should the need arises.

Can we spectate the meeting?

FOMC meetings are held in private. However, the minutes will be released 3 weeks after the meetings. You can find them here.

What are their tools?

- Open Market Operations (the buying and selling of securities in the open market by a central bank)
- Adjusting interest rates
- Determining reserve requirements

How can those tools be used?

For expansionary monetary policies

Open Market Operations
Buying more bonds in the open markets

Interest Rate
Lowering the rate when lending money to commercial banks

Reserve Requirements
Decreasing the amount of money that financial institutions have to keep at the reserve                           bank

All of the above actions will lead to more money flowing into the economy and thus stimulate economic activities

(The opposite is true for contractionary monetary policies)


FOMC meetings are among the most highly-anticipated events since the financial implications are widespread. Thus, market volatility usually increases around these times.


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