FOMC (Federal Open Market Committee)
The FOMC is the Federal Reserve committee that sets US interest rates - the single most important calendar event for the dollar.
The FOMC is the Federal Reserve committee that sets US interest rates, meeting eight times a year. Its decisions and the chair's tone are the most important scheduled events for the dollar.
The Federal Open Market Committee (FOMC) is the body within the US Federal Reserve that sets monetary policy, including the federal funds rate and quantitative easing programmes. It meets eight times a year, with a press conference after every other meeting. Its rate decision, statement and the chair's tone move every dollar pair, and the quarterly dot plot shows where individual members expect rates to go. The FOMC is the closest thing forex has to a scheduled market-moving event.
How It Works
- Eight scheduled meetings per year, with press conferences after most
- The statement, vote tally and dot plot all move markets
- The chair's press conference tone (hawkish or dovish) often matters as much as the decision
Trading Tips
Mark the meeting calendar before the week starts - volatility concentrates around the 2pm ET release
Trade the change in guidance, not just the rate level
Dot plot surprises (bigger or smaller rate path than priced) move USD sharply
Related Terms
Sources
- Federal Reserve - FOMCMeeting calendar and statements
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