Understanding FOMC Market News

The Federal Open Market Committee (FOMC) has twelve members. This includes the seven members of the Board of Governors of the Federal Reserve System; 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. The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth. Occasionally, the FOMC makes a change in monetary policy between meetings. The previous times it has done this was after telephone consultations in October 1998, i.e. during the financial crisis by 25bps to 5% and then January 2001 by 50bps to 6%, April 2001 by 50bps to 4.50 and September 2001 by 50bps to 3.50%.