Open Market Committee


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Federal Open Market Committee

An arm of the Federal Reserve System charged with setting standards for open market operations. That is, the FOMC sets the monetary policy for the United States by buying and selling securities and setting key interest rates, especially the rate at which banks lend each other money for overnight loans. Selling government securities and raising interest rates are how the Federal Reserve reduces the amount of money in the economy; these tools are used to slow unsustainable growth and to curb inflation. Buying securities and lowering interest rates increase the amount of money in the economy and are used to spur growth.

The Committee meets eight times per year and consists of the seven members of the Federal Reserve Board of Governors and five of the 12 Reserve Bank presidents. Four of the five presidents alternate for one-year terms, while the President of the New York Federal Reserve serves ex officio. It operates independently, although the Chairman of the Federal Reserve is required to appear before Congress at intervals. Somewhat controversially, its meetings are conducted in secret.

Open Market Committee

References in periodicals archive ?
The Open Market Committee consists in 1989 of the seven governors of the Federal Reserve Board and five of the 12 district bank presidents.
The Federal Open Market Committee, composed of Fed board members and regional bank presidents, concluded its closed-door deliberations with a brief announcement saying that ``in light of market uncertainties associated with the century date change'' it was important to focus policy on ``ensuring a smooth transition into the Year 2000.
Recent comments suggest the Federal Open Market Committee doesn't know what it will do in June.
The Federal Open Market Committee decided on May 3, 2005, to raise its target for the federal funds rate 25 basis points, to 3 percent.
The major market indices have moved higher, but are now basically in a holding pattern as investors breathlessly await news from the Federal Open Market Committee and the assumed quarter-point rate hike.
The Federal Reserve Board and the Federal Open Market Committee, released on May 24, 2005, the minutes of the Committee meeting held on May 3, 2005.
The Fed's policy-making Open Market Committee raised the short-term federal funds rate by a quarter of a percentage point to 5 percent on June 29, the first rate hike since March 1997.
During that period, he served as the vice chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation's monetary policy.
On December 14, 2004, the Federal Open Market Committee (FOMC) decided to move up the publication of its minutes to three weeks after the end of each meeting.
A The Federal Open Market Committee, the Fed's policy-making body, decided after two days of meetings to increase the federal funds rate, which banks charge each other on overnight loans, by a quarter percentage point to 5 percent.
25% since June 2004, the financial markets currently expect that the Federal Reserve Open Market Committee may not slow its pace of increasing rates until early 2006.
The Federal Open Market Committee decided on February 2, 2005, to raise its target for the federal funds rate 25 basis points, to 2 1/2 percent.