Federal Open Market Committee (FOMC)

The Federal Open Market Committee is a committee within the Federal Reserve System consisting of twelve members, including members of the Board of Governors of the Federal Reserve System and the president of the Federal Reserve Bank of New York.

The Federal Open Market Committee is the main body of US national monetary policy. The committee sets monetary policy by specifying the short-term target of the Federal Reserve ’s open market operations, which is usually the target level of the federal funds rate. Open market operations is one of the tools of monetary policy for the Federal Reserve to influence the demand and supply of balances that depository institutions hold at Federal Reserve Banks, resulting in adjusting the federal funds rate.