Know the FOMC Policy Makers
For traders, especially news traders, must have often heard FOMC. A frequently-awaited event if there is a FOMC meeting release schedule. It stands for Federal Open Market Committee. Then, what exactly is the FOMC? Here’s a brief explanation of the FOMC.
The Federal Open Market Committee (FOMC) is a team behind the US Federal Reserve that controls the availability of state funds through open market operations.
The mission and task of the FOMC is to evaluate the economic and financial conditions of the country. It also determines the right monetary policy through open market operations. One of the Fed’s main goals is to control US inflation by setting inflation targets. The committee aims to meet these targets by setting up the target of Federal funds rate as well as the interest rates on loans that are charged as bank fees when lending overnight to each other.
The sale of government securities to banks reduces the amount of funds that can be lent, which effectively increases interest rates. On the other hand, buying government securities from banks thus increasing the available funds in the market, by lowering the interest rate.
The FOMC consists of 14 members – 4 members of the Board of Governors of the Federal Reserve System; President of the Federal Reserve Bank of New York; and 5 of the 11 Presidents of the Reserve Bank, designated through an annual rotation system.
Current FOMC members (as of 2017) are as follows:
- Janet Louise Yellen, Board of Governors, Chairman
- William C. Dudley, New York, Vice Chairman
- Lael Brainard, Board of Governors
- Charles L. Evans, Chicago
- Stanley Fischer, Board of Governors
- Patrick Harker, Philadelphia
- Robert S. Kaplan, Dallas
- Neel Kashkari, Minneapolis
- Jerome H. Powell, Board of Governors
Other members as reserves are as follows:
- Marie Gooding, First Vice President, Atlanta
- Mark Mullinix, Richmond
- Loretta J. Mester, Cleveland
- Michael Strine, First Vice President, New York
- John C. Williams, San Francisco