What is the Federal Open Market Committee?
The Federal Open Market Committee (FOMC) is the body within the Federal Reserve System that sets national monetary policy. The FOMC's decisions influence the cost and availability of credit to borrowers and the returns earned by savers. The FOMC sets a target range for the federal funds rate (the rate at which depository institutions lend to each other). Changes in that target are reflected in market interest rates as well as interest rates on bank loans and deposits. The FOMC also makes decisions about the size and composition of the Federal Reserve's asset holdings, and it communicates with the public about the likely future course of monetary policy. The FOMC has eight regularly scheduled meetings a year in Washington, D.C. and has additional meetings as needed.