Understand FOMC: Meeting Schedule & Its Econ Impact
As 2024 approaches, investors are once again focusing on the Federal Open Market Committee (FOMC) meeting schedule and minutes.
The outcomes of the FOMC meetings not only impact global financial markets but also have profound implications for the direction of U.S. economic policy.
Below is the latest 2024 FOMC meeting schedule and a summary of recent meeting minutes to help you better understand future economic trends and policy changes.
FOMC Schedule
The following introduces the U.S. FOMC schedule.
1: Meeting Dates
| 2024 Meeting Dates |
|---|
| January 30-31 |
| March 19-20 |
| April 30-May 1 |
| June 11-12 |
| July 30-31 |
| September 17-18 |
| November 6-7 |
| December 17-18 |
You can check the FOMC schedule on the Federal Reserve's official website.
2: Timing
The U.S. observes Daylight Saving Time, so announcement times vary between summer and winter in different Asian countries.
Japan (Tokyo Time)
| January, November, December |
|---|
| Winter 4:00 AM: FOMC Policy Announcement |
| 4:30 AM: Press Conference |
| March, May, June, July, September |
|---|
| Summer 3:00 AM: FOMC Policy Announcement |
| 3:30 AM: Press Conference |
China (Beijing), Taiwan (Taipei), Hong Kong, Malaysia, and other Asian regions
| January, November, December |
|---|
| Winter 3:00 AM: FOMC Policy Announcement |
| 3:30 AM: Press Conference |
| March, May, June, July, September |
|---|
| Summer 2:00 AM: FOMC Policy Announcement |
| 2:30 AM: Press Conference |
What is the FOMC?
The FOMC, or "Federal Open Market Committee," is the body that determines U.S. monetary policy.
It is part of the Federal Reserve System (FRS), with the Federal Reserve Board (FRB) as its highest decision-making body. The FOMC typically meets every six weeks, holding eight meetings annually (with additional meetings as needed).
Of these eight annual meetings, four occur quarterly (March, June, September, December) and include economic forecasts from FRB members.
These economic projections include forecasts for key indicators like policy rates and real GDP over the next three years.
As the leading global economy and a military superpower, U.S. monetary policy carries significant influence, and FOMC decisions can have substantial market impacts.
Topics of Discussion
The FOMC primarily discusses methods of financial regulation in the U.S., with a focus on open-market operations (OMO).
Key forms of OMO include the federal funds rate (FF rate) and quantitative easing (QE).
1: FF Rate (Federal Funds Rate)
The FF rate is the short-term interest rate at which U.S. commercial banks lend reserves held at the Federal Reserve to other commercial banks.
The FOMC sets a target range for the FF rate and adjusts short-term rates by buying or selling bonds in the market to ensure rates fall within the target range.
2: QE (Quantitative Easing)
Quantitative easing involves monetary policy aimed at increasing money supply by injecting large amounts of liquidity into the market.
The main goal is to stimulate the economy by lowering long-term interest rates and driving up asset prices like stocks and real estate.
3: QT (Quantitative Tightening)
Quantitative tightening refers to monetary policy aimed at curbing an overheated economy or high inflation by withdrawing liquidity from the market.
This is achieved by allowing bonds to mature without reinvestment or selling government bonds, gradually reducing the size of the central bank's balance sheet.
FOMC Participants
The FOMC consists of seven members of the Federal Reserve Board and twelve regional Federal Reserve Bank presidents.
Among the seven board members, one serves as the Federal Reserve Chair, and two as Vice Chairs, all of whom have voting rights.
Among the twelve regional bank presidents, the New York Fed president and four other presidents (rotating annually) have voting rights, making a total of five.
The other seven presidents attend meetings but do not have voting rights.
Thus, U.S. monetary policy is decided by a vote among the seven board members and five regional bank presidents.
Typically, members favoring monetary tightening (rate hikes) are known as "hawks," while those favoring monetary easing (rate cuts) are known as "doves."
The Federal Reserve Board is the highest decision-making body of the Federal Reserve System, overseeing all twelve regional banks.
The FOMC comprises board members and the presidents of the twelve regional banks.
Decision-Making Process
The FOMC Chair is also the Chair of the Federal Reserve, and the Vice Chair is the president of the New York Fed.
Decisions are made by a simple majority vote among the twelve members with voting rights. The basic principles of open-market operations decided during the meetings are implemented by the New York Fed.
The Impact of FOMC on Exchange Rates
The Federal Open Market Committee (FOMC) makes various monetary policy decisions, among which changes in policy interest rates have a significant impact on exchange rates.
Below is a detailed explanation of how policy rate changes affect exchange rates.
Let’s also look at 5 key points to focus on during the FOMC.
The FOMC releases abundant information, and to effectively absorb it, attention should be concentrated on the following five key areas.
Key 1: Statement
After an FOMC meeting, the committee releases a statement summarizing its assessment of the economy and inflation, as well as basic decisions on whether to change monetary policy.
The statement may hint at potential monetary policy changes in future meetings, drawing close attention from numerous investors.
Even slight textual differences from the previous statement can prompt significant market reactions.
To get the information as quickly as possible, refer to the original statement. If your English proficiency is limited, you may use automatic translation tools or check news websites for instant updates.
The English version of the statement can be found in the "Federal Reserve Chair, ECB President, and BOJ Governor press conference videos."
Key 2: Federal Reserve Chair's Press Conference
Thirty minutes after the statement is released, the Federal Reserve Chair will hold a press conference. During this event, the Chair explains the meeting’s decisions, assesses the economy and inflation, and answers questions from the press.
The content of the press conference can lead to significant market volatility, so it requires close attention.
Until 2019, the Chair held press conferences only after every other FOMC meeting. Starting in 2019, press conferences are held after every meeting. Previously, monetary policy changes were more likely to occur at meetings with press conferences, but now every FOMC meeting could introduce new policies, necessitating preparedness.
Key 3: Summary of Economic Projections
At the March, June, September, and December FOMC meetings, participating members release the Summary of Economic Projections. This summary includes key forecasts for the next three years, such as:
Policy interest rates
Real GDP
Unemployment rates
PCE inflation rates
Core PCE inflation rates
All forecast data are important, but the most closely watched is the policy rate outlook.
This outlook is presented in the form of a Dot Plot, showing each member’s projection for the policy rate at year-end.
If the projections differ significantly from previous numbers, the market may react sharply.
Understanding the Dot Plot is essential.
Key 4: Meeting Minutes
Approximately three weeks after an FOMC meeting, the Meeting Minutes are released.
The minutes reveal internal discussions not covered in the statement or press conference, potentially causing significant market volatility.
However, since the market often obtains the main information from the statement and press conference, the minutes usually do not provide entirely new insights.
Still, the minutes might refocus market attention on U.S. monetary policy, increasing short-term exchange rate fluctuations, so they should not be overlooked.
April 30–May 1, 2024, FOMC Meeting Minutes
Release Date: May 22, 2024
Consensus on Maintaining Long-term Interest Rates, Divergence on Reducing Treasury Reduction Cap
・The minutes noted that the time required to gain confidence in a sustained decline in inflation might be longer than expected.
・A warning was issued that further monetary tightening might be necessary if inflation risks materialize.
・Inflation is reportedly pressuring low- and middle-income families, raising the risk of reduced consumer spending.
On May 22, 2024, the Federal Reserve Board (FRB) released the minutes of the Federal Open Market Committee (FOMC) meeting held on April 30–May 1, 2024. The minutes revealed that, given stronger-than-expected inflation and insufficient progress in disinflation, rate cuts are not anticipated. Instead, it is deemed necessary to maintain higher interest rates for an extended period.
The minutes stated: "While members acknowledged some easing in inflation over the past year, no further signs of progress toward the 2% annual inflation target have been observed in recent months."
The report also highlighted robust first-quarter GDP growth and persistent inflation:"Members believe that the time required to gain confidence in a sustained movement toward the 2% inflation target might be longer than previously anticipated."
As a result, the minutes concluded that the Federal Reserve must maintain high interest rates for a longer duration instead of commencing a rate-cutting cycle immediately:"Members discussed the need to maintain the current restrictive policy stance for a prolonged period unless there are clear signs of progress toward the 2% inflation target or unexpected deterioration in labor market conditions."
Some members expressed readiness to tighten monetary policy further if inflation risks materialize: "A few members indicated they were prepared to implement additional tightening measures if deemed necessary."
FOMC members remain highly uncertain about the inflation outlook. According to the minutes: "Members continue to anticipate that inflation will return to the 2% target in the medium term. However, recent data has not bolstered confidence in the progress toward this goal, suggesting the disinflation process may take longer than previously expected."
The minutes also underscored the significant impact of inflation on households: "Members widely expressed concern about how rising inflation is eroding the purchasing power of households, particularly those struggling to meet the high costs of essentials such as food, housing, and transportation."
Credit card usage and deferred payment services have increased, and some consumer loan delinquency rates are rising, indicating that consumers may increasingly rely on riskier financing channels amid inflationary pressures.
At the May meeting, the Federal Reserve decided to lower the monthly cap on Treasury reductions from $600 billion to $250 billion starting June 1. This move is intended to slow the balance sheet reduction as part of the exit from quantitative easing, reflecting a cautious approach. Reducing the Treasury runoff cap effectively acts as a form of monetary easing.
However, the decision to lower the cap was not unanimous. The minutes revealed differing opinions: "A minority of members supported maintaining the current pace of balance sheet reduction or setting the cap slightly above $250 billion."
This highlights the debate and differing perspectives behind the decision to lower the cap to $250 billion.
According to CME's FedWatch tool, the probability of the Federal Reserve implementing its first rate cut by September dropped to 50.9% (down from 51.6% the previous day). The likelihood of a second rate cut in December also declined slightly, from 37% to 36.3%.
March 19–20, 2024, FOMC Meeting Minutes
Release Date: April 10, 2024
Support for Reducing the Monthly Treasury Runoff Cap to $300 Billion
・The minutes indicated that there was insufficient evidence of sustained inflation decline, leading to the decision not to begin a rate-cutting cycle.
・They suggested that monetary easing might be considered if the labor market deteriorates.
・Most members expressed support for cautiously scaling down the size of the balance sheet.
The Federal Reserve released the minutes of the Federal Open Market Committee (FOMC) meeting held on March 19–20, 2024, on April 10, 2024. The minutes revealed that committee members were seeking evidence of declining inflation to determine the timing of a rate-cutting cycle but had not found sufficient confirmation.
The minutes stated: "Members noted that recent economic data indicated solid U.S. economic conditions, but inflation data remained disappointing. They deemed it inappropriate to lower the policy rate until there is greater confidence that inflation is steadily converging toward the 2% target."
This reflects concerns that current restrictive policies are insufficient to curb inflation and cool the economy, causing anxiety and disappointment among members.
The publication of these minutes garnered significant market attention, as investors sought insights into the FOMC's assessment of the U.S. economy and inflation, the factors influencing the timing and pace of rate cuts, and discussions regarding the reduction of the Fed's balance sheet, which ballooned to $7.5 trillion following quantitative easing (QE) policies.
The minutes also highlighted uncertainty surrounding both the economic and inflation outlooks: "Members generally agreed that the prolonged duration of elevated inflation remains uncertain, and recent data failed to reinforce confidence in a sustained decline toward the 2% target."
Some members noted that geopolitical risks could exacerbate supply chain bottlenecks and increase transportation costs, further fueling inflation while also potentially dampening economic growth: "Certain members pointed out that geopolitical risks could lead to more severe bottlenecks and higher transportation costs, increasing inflationary pressures while potentially restraining economic growth."
The minutes acknowledged uncertainty about the effectiveness of the Federal Reserve's tightening measures thus far: "There is uncertainty regarding whether monetary policy is sufficiently restrictive. If it falls short, aggregate demand may rise, further intensifying inflationary pressures."
The term "sufficiently restrictive" refers to interest rate levels high enough to curb economic activity effectively.
Despite these concerns, the Federal Reserve maintained that rate cuts would be the next step if data permits. According to the minutes: "Members widely agreed that after reaching the peak of this rate-hiking cycle, shifting to accommodative monetary policy at some point this year would be appropriate, provided the economy evolves as expected."
However, the minutes also pointed out that the current restrictive policy stance might need to persist for some time if uncertainties surrounding the economic and inflation outlooks remain unresolved.
At the same time, the minutes indicated the possibility of easing policies should economic conditions, particularly the labor market, deteriorate: "Members believe monetary policy will respond to economic prospects and associated risks. If the disinflation process slows, it may necessitate maintaining the current restrictive policy stance for a longer period. Alternatively, if the labor market underperforms expectations, easing the current policy stance may be required."
The minutes disclosed that most members supported continuing the current strategic approach to gradually reducing the balance sheet as part of the exit from QE. This involves scaling back Treasury and mortgage-backed securities (MBS) purchases.
Currently, the monthly cap for Treasury reductions is $600 billion, and the cap for agency MBS reductions is $350 billion. The minutes revealed a proposal to maintain the MBS reduction cap while lowering the Treasury runoff cap by half to $300 billion per month:"Members recommended maintaining the current cap for agency MBS reductions while reducing the Treasury runoff cap to $300 billion."
Minutes of the January 30-31, 2024 Meeting
Release date: February 21, 2024
Caution against premature rate cuts due to inflation risks, negative stance on early rate cuts
・Rate cuts are not appropriate until inflation is consistently heading towards 2%
・"Demand momentum is stronger than expected," emphasizing inflation risks
・The next meeting will discuss shrinking the balance sheet
The minutes of the Federal Open Market Committee (FOMC) meeting held from January 30 to 31, 2024, released on February 21, 2024, show that most members remain highly cautious about the possibility of prematurely starting a rate-cut cycle. This is due to the strong inflationary pressures that they continue to monitor, with a focus on avoiding rate cuts that are too fast, rather than too slow.
According to the minutes, most members emphasized the importance of carefully assessing whether inflation is consistently moving toward the 2% annual target. "Overall, the committee members agreed that it is inappropriate to cut rates until they are further convinced that inflation is persistently moving toward the 2% target." As a result, there is a cautious stance against premature rate cuts.
However, two members noted that delaying rate cuts could increase downside risks to the economy, and a few expressed concerns that slower rate cuts could worsen economic conditions.
The minutes also mention that although inflationary pressures have eased, "some members pointed out that if total demand strengthens or the recovery in supply chains is delayed, progress in price stability could stall, presenting risks." The meeting also discussed the uncertainty in the economic outlook. "Given the surprising resilience in personal consumption last year, overall demand may be stronger than currently assessed." As a result, "several members indicated that this could delay the progress in inflation suppression." Additionally, members raised concerns about inflationary risks due to geopolitical factors disrupting supply chains and the persistent high growth rate of wages.
Regarding reducing the balance sheet size, the minutes show that most members believe it is necessary to review the pace of the reduction. As part of its strategy to exit from Quantitative Easing (QE), the Federal Reserve is reducing purchases of U.S. Treasury bonds and mortgage-backed securities (MBS). The minutes state, "Many members believe that it will be appropriate to begin a full discussion of balance sheet issues at the next meeting, to make a final decision on whether to slow the pace of bond reduction."
Currently, the Fed has set a cap of $600 billion per month for U.S. Treasury bond reductions and $350 billion per month for MBS reductions.
Key Point 5: FOMC Member Comments
Members of the FOMC, including the Fed Chair, Vice Chair, governors, and regional Federal Reserve Bank Presidents, often make comments at various lectures, press conferences, and seminars.
FOMC member comments are closely watched by the market, and their influence is even greater when the market is especially sensitive to U.S. monetary policy.
As regional Federal Reserve Bank Presidents with voting rights also make comments, their influence is typically larger.
However, as the year draws to a close, the market's focus will gradually shift to the Presidents of the Federal Reserve Banks who will have voting rights next year.
Voting rights rotate annually among regional Presidents (except for the President of the New York Federal Reserve), so it's important to pay attention to which Presidents have voting rights.
For the voting rights arrangements from 2024 to 2026, you can refer to the Federal Reserve's official website.
Frequently Asked Questions About the FOMC
Here are some common questions about the FOMC:
How often does the FOMC meet in a year?
The FOMC meets approximately every six weeks, for a total of eight meetings per year.
The meetings in March, June, September, and December are especially notable because they include the publication of economic projections.
What is the "Beige Book"?
The Beige Book is an economic report compiled by the 12 regional Federal Reserve Banks of the United States.
Officially named the "Summary of Commentary on Current Economic Conditions," it is called the Beige Book because its cover is beige in color.
The content provides a comprehensive assessment of the overall U.S. economy, with detailed explanations of sectors such as manufacturing, finance, real estate, employment, and consumer spending.
The Beige Book is published two weeks before each FOMC meeting on Wednesdays and serves as a reference for FOMC decision-making on monetary policy.
Why is the FOMC important?
The FOMC is important because it decides and announces U.S. monetary policy.
As the U.S. economy has a significant impact on the global economy, the content of the FOMC announcements can lead to sharp fluctuations in exchange rates.
The FOMC determines important elements of U.S. monetary policy, such as the money supply and the target level for the federal funds rate, and provides forecasts for the economy from Federal Reserve members.
The outcome of the FOMC meeting may accelerate the depreciation or appreciation of the U.S. dollar, making it a key fundamental factor for foreign exchange traders.
What do other countries call the equivalent of the FOMC?
In Japan, the equivalent of the FOMC is the "Bank of Japan Monetary Policy Meeting," while in Europe, it is the "ECB Governing Council" held by the European Central Bank.
Here are the names of the meetings that decide policy interest rates in key countries/regions:
| Region | Meeting Name |
|---|---|
| Taiwan | Central Bank Board |
| Hong Kong | Hong Kong Monetary Authority Financial Committee |
| Singapore | Monetary Authority of Singapore Board |
| Japan | Bank of Japan Monetary Policy Decision Meeting |
| U.S. | Federal Open Market Committee |
| U.K. | Bank of England Monetary Policy Committee |
| Eurozone | European Central Bank Governing Council |
| Australia | Reserve Bank of Australia Board |
| China | People's Bank of China Monetary Policy Committee |
Central banks and core financial institutions in each country are responsible for maintaining the stable value of their respective currencies and supporting economic growth. To maintain a specific level of inflation, they adjust monetary policy tools such as the policy interest rate (FF rate).
For example, if a country's inflation is consistently above the target level, the central bank will implement a tight monetary policy (raising interest rates) to curb rising prices. Conversely, if inflation is consistently below the target level, they may implement a loose monetary policy (lowering interest rates) to stimulate price increases.
The United States is the most powerful country in terms of military and economic strength.
The U.S. dollar (USD) plays a central role as the core currency in global finance.
Therefore, the FOMC, which determines U.S. monetary policy, is closely watched by global investors and is one of the most important economic indicators to monitor when trading in foreign exchange.
This article explains in detail what the FOMC is, its 2024 meeting schedule, and future forecasts in a way that is easy to understand for beginners.
Summary: What is the FOMC? Detailed Explanation of the FOMC Meeting Schedule and Its Importance
The FOMC is the meeting where U.S. monetary policy is decided, primarily discussing the federal funds rate and open market operations like Quantitative Easing (QE).
Before 2023, the focus was on interest rate hikes to curb inflation, but with inflation stabilizing, attention will now shift to employment trends.
As a meeting closely watched by global investors, the FOMC is an essential economic indicator for foreign exchange traders.