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  3. What is the Relationship Among the Fed, FRB, and FOMC?

What is the Relationship Among the Fed, FRB, and FOMC?

Structure of the U.S. Federal Reserve System (Fed), Federal Reserve Board (FRB), Federal Open Market Committee (FOMC), and the 12 regional Federal Reserve Banks
The Fed, FRB, and FOMC are three layers of the U.S. central banking system. The Fed (Federal Reserve System) is the umbrella term for the entire central bank; the FRB (Federal Reserve Board) is the governing body that runs the Fed and, together with 12 regional Federal Reserve Banks, sets monetary policy; and the FOMC (Federal Open Market Committee) is the FRB's policy meeting, held eight times a year, that decides the target interest rate. Their decisions ripple through global forex, stock, and bond markets.

Whenever an FOMC meeting concludes, global currency, stock, and bond markets often move sharply. Yet the three terms that so often appear together—Fed, FRB, and FOMC—each play a distinct role. Understanding how they fit together is the first step to reading U.S. monetary policy and its market signals.

This article explains the definitions and relationships among the three, and how Federal Reserve policy shapes your investment strategy.

Key Takeaways
  • Fed: Federal Reserve System, the umbrella term for the U.S. central bank.
  • FRB: Federal Reserve Board, which sets policy with the 12 regional banks.
  • FOMC: Federal Open Market Committee, the FRB meeting held 8 times a year.
  • Dual mandate: The FRB targets maximum employment and price stability via the FF rate.
  • Market impact: FOMC statements, the dot plot, and minutes are key market drivers.
Table of Contents

1. What is the Fed?

The term Fed is the abbreviation for the Federal Reserve System, which is the general term for the central banking system of the United States, commonly referred to as “the Fed,” it includes the Federal Reserve Board (FRB) and the Federal Open Market Committee (FOMC).

2. What is the FRB?

The term FRB is the abbreviation of the Federal Reserve Board.

The FRB decides various financial policies of the United States together with the 12 regional Federal Reserve Banks.

Unlike the central banks in countries like Japan, the UK, Singapore, China, and Taiwan, which operate as single institutions, the U.S. central bank is a collective consisting of 12 regional banks, collectively known as the FRB.

These 12 banks are located in the following regions.

Reserve DistrictFederal Reserve Bank
1st Federal Reserve DistrictFederal Reserve Bank of Boston
2nd Federal Reserve DistrictFederal Reserve Bank of New York
3rd Federal Reserve DistrictFederal Reserve Bank of Philadelphia
4th Federal Reserve DistrictFederal Reserve Bank of Cleveland
5th Federal Reserve DistrictFederal Reserve Bank of Richmond
6th Federal Reserve DistrictFederal Reserve Bank of Atlanta
7th Federal Reserve DistrictFederal Reserve Bank of Chicago
8th Federal Reserve DistrictFederal Reserve Bank of St. Louis
9th Federal Reserve DistrictFederal Reserve Bank of Minneapolis
10th Federal Reserve DistrictFederal Reserve Bank of Kansas City
11th Federal Reserve DistrictFederal Reserve Bank of Dallas
12th Federal Reserve DistrictFederal Reserve Bank of San Francisco
These 12 banks

3. What is the FOMC?

The term FOMC, is the abbreviation of the Federal Open Market Committee, refers to the committee within the FRB holding regular meetings.

The meeting is attended by the FRB board members and five of the presidents of regional Federal Reserve Banks.

The FOMC meets eight times a year to discuss mainly about the economic goals like interest rate.

4. Responsibilities of the FRB

The responsibilities of FRB are to achieve the dual mandate of “maximum sustainable employment” and “price stability” through various financial policies.

The FRB decides if and how to adjust the policy rate, whether by raising or lowering it, and sets target rates accordingly.

The rate adjusted by FRB is the federal funds rate (FF rate). In the U.S., commercial banks are required to deposit federal funds (reserve deposits) into the Federal Reserve Banks.

While these federal funds do not accrue interest, the rate at which banks lend to each other is known as the FF rate. When the FRB “raises rates,” it refers to the increase of the target level for the FF rate.

How does RB as a central bank raise the lending rates among commercial banks? Since the FRB cannot dictate exact lending rates among commercial banks, it indirectly guides the FF rate by adjusting the currency in circulation in the market.

5. The Position of the FOMC

As mentioned before, the FRB decides whether to adjust the policy rate (whether to raise or lower rates) and the actual target rate level for adjustment.

These decisions are made in FOMC meetings, where market attention focuses on four key aspects:

1: Statement

2: FRB Chair’s Press Conference

3: The Summary of Economic Projections by FOMC Members

4: Meeting Minutes

Statement

After the end of the FOMC meeting, a statement is released that summarizes the overview of the evaluation of economic conditions and commodity prices, and basic decisions such as whether to adjust financial policies.

FRB Chair’s Press Conference

Thirty minutes after the release of the statement, the FRB Chair holds a press conference to elaborate on the decisions made during the meeting, comment on trends of economic conditions and commodity prices, and then answer questions from the reporters.

These sessions may ignite significant market reactions, and thus require close attention.

The Summary of Economic Projections by FOMC Members

FOMC releases the Economic Projections provided by FOMC members quarterly (in March, June, September, and December), covering their projection on policy rates, actual GDP, unemployment rates, and PCE inflation and core PCE inflation for the next three years.

Every projection data is important, but the most focused projection is that of policy rate.

Meeting Minutes

About three weeks after the FOMC meeting, Meeting Minutes are released, offering additional discussion which is not revealed in the statement and press conference.

Comments by FOMC Members

The FRB Chair, Vice Chair, Governors, and presidents of regional Federal Reserve Banks often comment on various lectures, press releases, and workshops, as an FOMC member.

The comments by FOMC members are always closely watched, but while the market is highly focused on U.S. financial policies, these comments will be more sensitive.

6. Frequently Asked Questions

Q1. What is the difference between the Fed, FRB, and FOMC?

The Fed is the umbrella term for the U.S. central banking system, the FRB is the board that runs it (the decision-making core), and the FOMC is the meeting the FRB holds to set the policy rate. In short, they form a "system → body → meeting" hierarchy (see §1–§3).

Q2. How often does the FOMC meet, and what does it publish?

The FOMC holds eight regular meetings a year. Each meeting ends with a statement and a press conference by the Chair; quarterly (March, June, September, December) it releases the Summary of Economic Projections (including the dot plot), and minutes follow about three weeks later (see §5 The Position of the FOMC).

Q3. What is the FF rate and how does the FRB adjust it?

The federal funds (FF) rate is the rate at which commercial banks lend reserves to each other overnight. The FRB cannot dictate it directly, so it guides the FF rate indirectly by adjusting the amount of money circulating in the market (see §4 Responsibilities of the FRB).

Q4. What is the dot plot?

The dot plot is part of the FOMC's Summary of Economic Projections, showing each member's expected level for the future policy rate as a dot. It is one of the most closely watched gauges of the likely path of rate hikes or cuts (see §5).

Q5. Why do FOMC decisions move forex and stock markets?

The policy rate the FOMC sets directly affects U.S. dollar interest rates and capital flows. Rate hikes tend to lift the dollar and weigh on risk assets, while cuts do the opposite, so investors watch FOMC decisions and wording closely to adjust their forex and equity strategies.

7. Summary

AbbreviationFull TermChinese TranslationDescription
FEDFederal Reserve System聯邦準備系統The central banking system
FRBFederal Reserve Board聯邦準備理事會The central bank
FOMCFederal Open Market Committee聯邦公開市場委員會Committee within the FRB

In summary, the Fed is the entire U.S. central banking system, the FRB is its decision-making core, and the FOMC is the meeting where monetary policy is decided. Understanding how the three relate helps investors read market news and policy signals more accurately.

Further Reading
✏️ About the Author

Titan FX Trade Strategy Research Lab covers forex (FX), commodities (oil, precious metals, agricultural products), stock indices, U.S. equities, and crypto assets, producing educational content for retail investors across asset classes.

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