In simple terms
The Federal Open Market Committee, or FOMC, is the monetary policymaking body of the Federal Reserve System. It sets the target for the federal funds rate, the rate US banks charge each other overnight.
That single decision ripples outward. It shapes what savers earn and what borrowers pay, in the United States and well beyond it.
How it works
The committee has twelve voting members: the seven members of the Board of Governors, 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. All twelve Reserve Bank presidents join the discussion, but only five vote at any one time.
The FOMC holds eight regularly scheduled meetings a year, about one every six weeks, and can meet at other times if conditions demand it. At each meeting it reviews economic and financial conditions and decides the stance of policy.
It then directs open market operations to hold the federal funds rate inside the chosen range. A statement follows each meeting, minutes appear three weeks later, and full transcripts are released after five years.
Other countries have their own version. The closest equivalents are the Bank of England’s Monetary Policy Committee and the European Central Bank’s Governing Council.
Why it matters
Mortgage rates, business loans and savings returns all move with the committee’s decisions. Because the dollar is the main global reserve currency, borrowing costs in many other countries move too.
Markets read the statement closely for hints about the next decision. The wording often matters as much as the number.
Where you’ll see it
- News that the Fed has raised, cut or held rates
- Mortgage and credit card rate coverage
- Currency and bond market reports
- Economic projections published four times a year
Example
At its meeting on September 16, 2026, the FOMC set a target range of 3.75 to 4 percent for the federal funds rate, effective the following day.
Often confused with
The FOMC is not the whole Federal Reserve. The Board of Governors handles regulation and supervision. The FOMC’s job is monetary policy.
Key facts
- The FOMC has twelve voting members: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven Reserve Bank presidents serving one year rotating terms.1
- The committee holds eight regularly scheduled meetings a year, about one every six weeks, and can hold unscheduled meetings when developments require them.2
- All twelve Reserve Bank presidents attend meetings and take part in the discussion, whether or not they hold a vote that year.2
- Minutes are published three weeks after each meeting, and full transcripts five years afterward.2
- On September 16, 2026 the FOMC set a federal funds target range of 3.75 to 4 percent, effective September 17, 2026.3
Related concepts
In the news
Quick checkHow many of the twelve Reserve Bank presidents hold an FOMC vote at any one time?Show answer
Five: the New York president permanently, plus four others on a one year rotation.
Sources
- Board of Governors of the Federal Reserve System. Federal Open Market Committee. Undated (accessed 22 September 2026)
- Board of Governors of the Federal Reserve System. What is the FOMC and when does it meet?. Undated (accessed 22 September 2026)
- Board of Governors of the Federal Reserve System. Implementation Note issued September 16, 2026. 16 September 2026 (accessed 22 September 2026)
- Britannica Money. Federal Open Market Committee (FOMC): History, Functions, and Members. Undated (accessed 22 September 2026)
Editorially reviewed by Specialty Digest Editorial TeamLast reviewed September 22, 2026Researched and drafted with AI assistanceReport an issue