FOMC meeting

The FOMC, the Federal Open Market Committee, is the group inside the Federal Reserve responsible for setting the federal funds rate. An FOMC meeting is one of eight regularly scheduled meetings held each year, where the committee reviews economic data and votes on whether to raise, cut, or hold rates steady.

Each meeting ends with a policy statement explaining the decision, followed by a press conference where the Fed chair takes questions from reporters. Investors scrutinize small changes in the statement's wording almost as closely as the rate decision itself, since a shift in language can signal how the committee is likely to act at future meetings. Several times a year, the FOMC also releases a set of individual members' rate projections, often called the dot plot, giving the market a sense of where officials expect rates to go.

FOMC meeting days are consistently among the most volatile trading days of the year, since the announcement and the chair's comments in the press conference can move stock and bond prices sharply within minutes, sometimes reversing an initial reaction as investors digest the details more carefully.