The primary role of the Federal Reserve System, the nation’s central bank, is to realize national economic goals through monetary policy actions that influence the availability and cost of money and credit in the economy.
The Federal Open Market Committee is responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments. The FOMC consists of the seven members of the Board of Governors of the Federal Reserve System and five Federal Reserve Bank presidents, all of whom have studied the economy in their district states and are voting members of the committee on a rotating basis. The FOMC holds eight regularly scheduled meetings during the year and other meetings as needed. Meetings are attended by all Federal Reserve Bank presidents and designated staff of the Board of Governors.
Federal Open Market Committee
The FOMC is the most important monetary policymaking body of the Federal Reserve System. It is responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.
The FOMC makes key decisions regarding the conduct of open market operations—purchases and sales of U.S. Government and Federal Agency securities—which affect the provision of reserves to depository institutions and, in turn, the cost and availability of money and credit in the U.S. economy. The FOMC also directs System operations in foreign currencies.
Membership of the Committee
The FOMC is composed of the seven members of the Board of Governors and five Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves on a continuous basis; the presidents of the other Reserve Banks serve on a rotating basis for one-year terms beginning on January 1 of each year. Rotation is conducted so that each year one member is elected to the committee by the board of directors of each of the following groups of Reserve Banks:
- Boston, Philadelphia, and Richmond;
- Cleveland and Chicago;
- Atlanta, St. Louis, and Dallas; and
- Minneapolis, Kansas City, and San Francisco.
More information on the FOMC
The following links will direct you off of our Minneapolis Fed site.
- Current Members of the FOMC (Board of Governors) [offsite]
- Monetary Policy [offsite]
- Monetary Policy Objectives [offsite]
- Federal Open Market Committee [offsite]
- FOMC Meeting Dates/Meeting Minutes [offsite]
- Beige Book Schedule [offsite]
Instruments of Monetary Policy
Open Market Operations
The purchases and sales of U.S. Treasury and federal agency securities are the Federal Reserve’s principal tool for implementing monetary policy.
- Open Market Operations [offsite]
Discount Window
The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank’s lending facility—the discount window.
- Federal Reserve Discount Rates [offsite]
Reserve Requirements
Reserve requirements [offsite] are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. Within limits specified by law, the Board of Governors has sole authority over changes in reserve requirements. Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks.