The Federal Open Market Committee sets a target range for the federal funds rate at eight scheduled meetings a year. Twelve members vote: seven Fed governors, the New York Fed president and four rotating Reserve Bank presidents. The decision is published in a statement at 2:00 p.m. Eastern Time.
What the FOMC actually decides
The Federal Open Market Committee (FOMC) is the Federal Reserve body that sets U.S. monetary policy. Its main decision is a target range for the federal funds rate, the rate banks charge each other for overnight loans of reserves. The range is normally 25 basis points wide, for example 4.25% to 4.50%.
The Fed does not set the market rate by decree. It steers it into the range with administered rates: the interest rate on reserve balances (IORB) it pays banks, and the overnight reverse repo (ON RRP) rate it offers money funds. The New York Fed publishes the resulting effective federal funds rate (EFFR) every business day.
Who votes
The committee has twelve voting members:
- the seven members of the Board of Governors,
- the president of the Federal Reserve Bank of New York (a permanent voter),
- four of the other eleven Reserve Bank presidents, rotating each calendar year.
All twelve Reserve Bank presidents attend and take part in the discussion; only the current rotation votes. The Fed Chair also chairs the FOMC. Dissents are recorded by name in the statement.
The meeting cycle
| Step | Timing | What you get |
|---|---|---|
| Scheduled meeting | Eight per year, roughly every six weeks | Calendar on federalreserve.gov a year or more ahead |
| Blackout period | From the second Saturday before the meeting to the day after | Officials stop speaking publicly about policy |
| Statement | 2:00 p.m. ET on the final day | The decision, the vote and a short economic assessment |
| Press conference | 2:30 p.m. ET | The Chair’s explanation and Q&A |
| Summary of Economic Projections | March, June, September and December meetings | Median projections and the dot plot |
| Minutes | Three weeks after the meeting | A fuller account of the discussion |
Our release calendar lists the upcoming FOMC decision dates alongside BLS releases, with the Fed calendar as the cited source.
How to read the statement
The statement is short and changes little from meeting to meeting, so the edits are the news. A useful habit is to compare it line by line with the previous one; the Fed publishes both on its site. Look for:
- The decision and the vote. Any dissent and its direction.
- The assessment of activity, jobs and inflation. Words such as “solid”, “moderated” or “somewhat elevated” are chosen deliberately.
- Forward guidance. Phrases about the “extent and timing of additional adjustments” signal whether the committee sees itself as finished.
- Balance sheet. Changes to the pace of Treasury and mortgage-backed securities runoff.
How to read the dot plot
Each participant (all nineteen when the Board is full, voters or not) places one dot for where they think the federal funds rate should be at the end of each year and in the longer run. The median dot is what headlines quote.
Three cautions:
- The dots are individual views conditional on each person’s own forecast, not a committee plan.
- Participants change; a shift in the median can reflect new members rather than new views.
- Markets often price a different path. Treasury bill and two-year yields, shown on our yield curve page, are a quick read of what investors expect.
What drives the decision
The Fed’s statutory goals are maximum employment and stable prices, plus moderate long-term interest rates. The committee defines price stability as 2% inflation measured by the PCE price index. In practice the inputs it discusses are the ones on this site: payrolls, the unemployment rate, wage growth and inflation, plus PCE and financial conditions.
That is why the jobs report and CPI release dates matter so much in the weeks before a meeting: they are the last major data the committee sees.
Common misreadings
- “The Fed sets mortgage rates.” It does not. Mortgage rates track longer-term Treasury yields plus spreads; the funds rate affects them indirectly.
- “A cut means the economy is weak.” Cuts can also reflect inflation falling toward target, which makes a given nominal rate more restrictive in real terms.
- “The minutes reveal the next move.” Minutes describe the last meeting. New data since then often matter more.
Bottom line
Know the calendar, read the statement as a set of edits, treat the dot plot as a range of personal views, and check the data released between meetings. Compare the Fed’s process with the European Central Bank’s in how ECB key rates work.
Frequently asked questions
- How many times a year does the FOMC meet?
- Eight regularly scheduled meetings, roughly every six weeks, plus unscheduled meetings when needed. The calendar is published in advance on federalreserve.gov.
- What is the dot plot?
- A chart in the Summary of Economic Projections showing each participant's view of the appropriate federal funds rate at the end of each year. It is published four times a year and is not a committee forecast or promise.
- When are FOMC minutes released?
- Three weeks after each meeting, at 2:00 p.m. Eastern Time.