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The FOMC (Federal Open Market Committee) is the decision-making body for U.S. monetary policy.
During the FOMC meeting held from January 28 to 29, 2025, the decision was made to maintain the policy interest rate between 4.25% and 4.50%.
This article will explain the basic concept of the FOMC, the meeting schedule for 2025, and future market predictions in a simple and easy-to-understand manner.
The FOMC, short for the Federal Open Market Committee, is the body that determines the U.S. monetary policy.
It is convened approximately every 6 weeks by the Federal Reserve System (FRS) and its highest decision-making body, the Federal Reserve Board (FRB). The FOMC holds 8 meetings each year, although additional meetings may be called if necessary.
Moreover, during meetings held in March, June, September, and December, the FOMC members release economic forecasts, including projections for the policy interest rate and other major economic indicators, such as real GDP growth over the next three years.
Due to the far-reaching influence of U.S. monetary policy on the global financial market, FOMC decisions attract significant attention.
Next, we will explain:
The FOMC primarily discusses the U.S. monetary policy tools, especially Open Market Operations (OMO), which include:
The Federal Funds Rate (FFR) is the short-term interest rate at which U.S. commercial banks lend reserve balances to other depository institutions overnight. The FOMC sets a target range for the FFR and adjusts short-term rates by buying or selling government bonds to bring the rate within this target.
Quantitative Easing is a monetary policy where the Federal Reserve increases the money supply to stimulate economic growth. This is typically done by purchasing long-term government bonds and mortgage-backed securities (MBS) to lower long-term interest rates, which in turn encourages investment and consumption.
Quantitative Tightening, the opposite of QE, involves reducing the Fed’s balance sheet by halting the purchase of new assets or selling off existing assets (such as government bonds) to withdraw money from the market and control inflation and overheating economic activities.
The FOMC consists of 7 Federal Reserve Board (FRB) Governors and 12 Federal Reserve Bank Presidents, including:
The remaining 7 regional bank presidents attend the meetings but do not have voting rights.
Thus, at each FOMC meeting, there are 12 members with voting rights who determine U.S. monetary policy.
Additionally, the policy stances of FOMC members also influence market expectations:
The U.S. central bank is referred to as the Federal Reserve System (FRS) or the Federal Reserve Board (FRB), differing slightly from the structures of central banks in countries like Japan or Europe.
The Federal Reserve is the central decision-making body of the Federal Reserve System (FED), overseeing the 12 regional Federal Reserve Banks.
The Federal Open Market Committee (FOMC) is a meeting held by the Federal Reserve Board members and Presidents from the 12 regional Federal Reserve Banks.
Further reading: What is the relationship between the Fed, FRB, and FOMC?
The FOMC is chaired by the Chair of the Federal Reserve, with the President of the New York Federal Reserve acting as Vice-Chair.
Voting is conducted via a simple majority, with 12 voting members determining the policy direction.
Once a policy is decided, the Federal Reserve directs the New York Federal Reserve to implement the corresponding Open Market Operations (OMO).
The FOMC meeting from January 28 to 29, 2025 decided to keep the federal funds rate (FFR) between 4.25% and 4.50%.
The next FOMC meeting will be held from March 18 to 19, 2025.
Additionally, during the March, June, September, and December meetings, the FOMC will release the Summary of Economic Projections (SEP).
| Meeting Date | SEP Release |
|---|---|
| January 28–29 | ✖ No |
| March 18–19 | ✅ Yes |
| May 6–7 | ✖ No |
| June 17–18 | ✅ Yes |
| July 29–30 | ✖ No |
| September 16–17 | ✅ Yes |
| October 28–29 | ✖ No |
| December 9–10 | ✅ Yes |
The U.S. observes Daylight Saving Time (DST), so the timing of FOMC announcements differs between summer and winter.
For the U.S. Eastern Time Zone:
| Month | Policy Decision Time | Press Conference Time |
|---|---|---|
| January, December (Standard Time) | 15:00 | 15:30 |
| March, May, June, July, September, October (Daylight Saving Time) | 14:00 | 14:30 |
FOMC's monetary policy decisions have a profound impact on the global market, with other central banks setting their interest rates based on their own economic conditions. Below is the 2025 schedule for major central banks:
| Bank of Japan (BOJ) | European Central Bank (ECB) | Bank of England (BOE) | Reserve Bank of Australia (RBA) |
|---|---|---|---|
| January 23–24 | January 30 | February 6 | February 17–18 |
| March 18–19 | March 6 | March 20 | March 31–April 1 |
| April 30–May 1 | April 17 | May 8 | May 19–20 |
| June 16–17 | June 5 | June 19 | July 7–8 |
| July 30–31 | July 24 | August 7 | August 11–12 |
| September 18–19 | September 11 | September 18 | September 29–30 |
| October 29–30 | October 30 | November 6 | November 3–4 |
| December 18–19 | December 18 | December 18 | December 8–9 |
Note: From 2024 onward, the Reserve Bank of Australia (RBA) will reduce the number of meetings from 11 to 8 annually, holding one meeting approximately every 6 weeks.
The ECB also observes Daylight Saving Time (DST), so the policy announcement times vary.
| Month | Policy Decision Time | Press Conference Time |
|---|---|---|
| January, March, October, December (Standard Time) | 09:15 | 09:45 |
| April, June, July, September (Daylight Saving Time) | 09:15 | 09:45 |
The BOE also observes Daylight Saving Time (DST), and policy announcements are released as follows:
| Month | Policy Decision Time |
|---|---|
| February, March, November, December (Standard Time) | 08:00 |
| May, June, August, September (Daylight Saving Time) | 08:00 |
The Reserve Bank of Australia (RBA) observes both Daylight Saving and Standard Time. Here are the release times:
| Month | Policy Decision Time | Press Conference Time |
|---|---|---|
| May, July, August, September (Standard Time) | 00:30 | 01:30 |
| February, March, November, December (Daylight Saving Time) | 00:30 | 01:30 |
Canada also observes Daylight Saving Time (DST), with policy announcements at:
| Month | Policy Decision Time |
|---|---|
| January, March, October, December (Standard Time) | 10:00–11:00 |
| April, June, July, September (Daylight Saving Time) | 10:45 |
The Swiss National Bank (SNB) releases policy decisions at:
| Month | Policy Decision Time |
|---|---|
| March, December (Standard Time) | 04:30 |
| June, September (Daylight Saving Time) | 04:30 |
Additionally, market forecasts for economic indicators are released ahead of time.
If decisions differ significantly from market expectations, they can have a major impact not only on exchange rates but also on stock markets, commodity markets, and global markets.
It is essential to monitor the deviation between market forecasts and actual outcomes. Titan FX offers Economic Calendar, where you can view the importance of economic indicators as well as previous forecast and result data.
The calendar on the left allows you to choose any period.
It also features a function to filter by country/region, enabling you to view economic indicators for specific regions.
The FOMC releases various information, and it is recommended to focus on the following five key points:
The FOMC releases a statement following each meeting.
This statement outlines the assessment of the economy and prices, as well as the decision on whether to change financial policies.
The statement may hint at policy adjustments for the next meeting, drawing significant attention from investors.
Market reactions are often sensitive to changes in the wording of the statement.
It is advisable to refer to the original English text for more accurate information. If unfamiliar with English, translation services or breaking news on websites may help.
30 minutes after the statement, the Federal Reserve Chair holds a press conference.
In this conference, the Chair explains the meeting's decision, assesses the economy and prices, and answers questions from the press.
The content of the press conference can trigger significant market reactions, requiring special attention.
Before 2018, press conferences were held after every other meeting. Starting in 2019, a press conference is held after each FOMC meeting.
Policy changes are more likely during meetings with press conferences, though starting in 2019, adjustments can occur at any meeting.
The FOMC releases the Summary of Economic Projections (SEP) quarterly (March, June, September, December).
The projections cover the policy interest rate, GDP, unemployment rate, PCE inflation rate, and core PCE inflation rate for the next three years.
Among these, the projection for the policy rate (also known as the "dot plot") is of the most interest.
※Data Source: CME Group*
The December 2024 dot plot showed:
If the projections differ from those made three months earlier, exchange rates may respond sensitively.
The December 2024 dot plot showed a slower pace of rate cuts starting in 2025, causing a spike in USD/JPY immediately after the release.
The dot plot can be confirmed on the Federal Reserve's official website.
The FOMC publishes the meeting minutes approximately three weeks after the meeting.
The minutes provide insights into discussions not covered in the statement and press conference, which may trigger sensitive market reactions.
Since the market has already obtained major information from the statement and press conference, the meeting minutes usually don't contain new material. However, they can occasionally become a key opportunity for monitoring financial policy, leading to market volatility after their release.
FOMC members include the Federal Reserve Chair, Vice Chair, Governors, and the Presidents of the regional Federal Reserve Banks. They frequently provide comments during speeches, press conferences, and seminars.
These comments are closely watched, and the market tends to react sensitively, especially when there is heightened focus on U.S. monetary policy.
Among the comments from regional Federal Reserve Bank Presidents, those with voting rights have a greater impact.
Toward the end of the year, the market pays closer attention to the Presidents with voting rights for the upcoming year. Voting rights rotate annually (the New York Fed President always holds a voting right). The FOMC members with voting rights in 2025 include:
Voting rights for 2024–2026 can be confirmed on the Federal Reserve's official website.
When determining policy rates, the FOMC mainly refers to the following three key economic indicators:
The CPI (Consumer Price Index) measures changes in the prices of goods and services, serving as a key indicator of inflation.
If inflation exceeds the target, the FOMC may adopt a tightening policy (rate hikes) to curb price increases. If inflation falls below the target, the FOMC may implement an easing policy (rate cuts) to stimulate price growth.
Therefore, monitoring price trends through the CPI is essential for understanding monetary policy.
The PCE Price Index reflects personal consumption trends in the U.S., serving as a key indicator of inflation or deflation.
Compared to the CPI, the PCE Price Index better accounts for changes in consumer behavior and preferences, making it more relevant for FOMC decision-making.
U.S. labor market data, including non-farm payroll employment, unemployment rate, average hourly earnings, and labor force participation rate, provide critical insights into the health of the U.S. economy.
During periods of economic strength, the FOMC may adopt a tightening policy (rate hikes), leading to higher U.S. interest rates. This tends to attract investors to the U.S. dollar, driving up its value.
During economic downturns, the FOMC may adopt an easing policy (rate cuts), causing U.S. interest rates to decline. This typically weakens the dollar due to increased selling pressure.
Understanding U.S. labor market data is crucial for predicting monetary policy shifts.
What is Non-Farm Payroll (NFP)?
FOMC statements and press conferences are published in English. It is recommended to consult the original English reports for accuracy.
If you are not familiar with English, you can refer to news summaries from sources like Reuters and Bloomberg.
Another method to gather information is by monitoring the expected policy rate for the next FOMC meeting.
One key resource for predicting future FOMC moves is the interest rate futures market.
The interest rate futures market focuses on rate movements and is considered highly reliable for tracking Federal Reserve trends.
A useful tool for predicting policy rates is the FedWatch Tool.
Common questions about the FOMC include:
FOMC results are announced at 14:00 ET (during Daylight Saving Time) and 15:00 ET (during Standard Time).
The Fed Chair’s press conference follows 30 minutes later at 14:30 ET (Daylight Saving Time) and 15:30 ET (Standard Time).
The FOMC meets approximately once every six weeks, for a total of eight meetings per year.
The meetings in March, June, September, and December also include an updated economic outlook, which tends to attract higher market attention.
Daylight Saving Time (DST) is the practice of setting the clock forward by one hour during the summer months to extend evening daylight.
It is observed in regions with significant seasonal daylight variation, including North America, Europe, and Australia.
Compared to regions without DST, the time difference with the U.S. is reduced by one hour during Daylight Saving Time.
U.S. Daylight Saving Time starts on the second Sunday of March and ends on the first Sunday of November each year.
The Beige Book is a report prepared by the 12 regional Federal Reserve Banks that summarizes economic conditions in each district.
Named after its beige cover, the Beige Book includes an overall economic assessment and insights into sectors such as manufacturing, finance, real estate, employment, and consumer spending.
It is published two weeks before each FOMC meeting and serves as a key reference for monetary policy decisions.
The FOMC is important because it sets U.S. monetary policy, which influences global economic conditions.
FOMC decisions on interest rates and money supply can trigger significant fluctuations in the foreign exchange market.
The FOMC determines the target for the federal funds rate, releases economic projections, and issues statements that can cause major movements in the value of the U.S. dollar and other currencies.
What is the FOMC? | Meeting Schedule and Future Outlook
The Federal Open Market Committee (FOMC) is responsible for setting U.S. policy rates, influencing a wide range of economic activities and market movements.
The FOMC holds eight scheduled meetings each year (approximately every six weeks) and may convene additional meetings if necessary.
