Federal Open Market Committee Meeting - FOMC Meeting
Definition of 'Federal Open Market Committee Meeting - FOMC Meeting'The meeting of the Federal Open Market Committee (FOMC) that occurs eight times a year. In the FOMC meeting, the FOMC, consisting of 12 members, determines near-term monetary policy. The changes that are decided on, are announced immediately after the FOMC Meeting. |
|
Investopedia explains 'Federal Open Market Committee Meeting - FOMC Meeting'Because the Fed determines interest rate policy at the FOMC meeting, the announcement following this meeting is very important. Speculation often occurs weeks in advance, about what will happen with interest rates following the meeting. The minutes of this meeting are released three weeks after the gathering. This is a vast improvement over the six to eight week lag that existed prior to December 14, 2004.The expected change in rate (if any), is often priced into the markets prior to the announcement, which can cause drastic market action should the announcement be different from what was expected. Interest rate cuts can stimulate the economy, but at the same time, reduce the value of the currency. |
Related Definitions
Articles Of Interest
-
Translating "Fed Speak" Into Plain English
Confused by the Fed's lingo? Find out what it can tell you and learn how to decipher it. -
Economic Indicators For The Do-It-Yourself Investor
These tools put the market in your hands. -
What You Should Know About Inflation
Find out how this figure relates to your investment portfolio. -
How do open market operations affect the U.S. money supply?
Formulating a country's monetary policy is extremely important when it comes to promoting sustainable economic growth. More specifically, monetary policy focuses on how a country determines the ... -
Explaining The World Through Macroeconomic Analysis
From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone. -
Who determines interest rates?
In countries using a centralized banking model, interest rates are determined by the central bank. In the first step of interest rate determination, the government's economic observers create ... -
What is GDP and why is it so important?
The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a ... -
Economic Indicators To Know
The economy has a large impact on the market. Learn how to interpret the most important reports. -
Why The Consumer Price Index Is Controversial
Find out why economists are torn about how to calculate inflation. -
Predict Inflation With The Producer Price Index
Find out how the PPI can be used to gauge the overall health of the economy.
Free Annual Reports