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
FOMC (Federal Open Market Committee) Example
Say the Fed holds rates but the dot plot shifts from two cuts to one. The statement reads unchanged, yet the dollar surges because the chair sounds relaxed about inflation while the dots say patience. The press conference moves more money than the decision.
How Traders Use FOMC (Federal Open Market Committee)
Read the dots and listen to the tone, not just the rate. Position small into the decision, then trade what the statement actually reprices: yields first, dollar second, gold and stocks after.
Related Terms
Sources
- Federal Reserve - FOMCMeeting calendar and statements
Put Your Knowledge Into Practice
Compare regulated brokers and find the best one for your trading style.