Federal Open Market Committee (FOMC)

The committee brings together the governors of the Federal Reserve Board and a rotating group of Reserve Bank presidents, with the president of the New York Federal Reserve holding a permanent seat because that bank carries out the open market operations the committee directs. It meets on a schedule published a year in advance, and can meet outside it when conditions require. Its decisions cover the target range for the federal funds rate and the size and composition of the central bank's balance sheet.

Each meeting produces a statement at the moment of the decision, a press conference, and minutes released some weeks later. Certain meetings add a summary of economic projections, including the chart of individual rate projections known informally as the dot plot. Those projections are the separate views of individual participants, gathered at one moment, not a committee forecast and not a commitment, and they are revised at every projection round.

What most often trips readers up is that hawkish and dovish describe tone relative to what was already expected, not in absolute terms. A decision to raise the target range can be read as dovish if the accompanying language signals fewer rises ahead than the market had priced, and an unchanged decision can be read as hawkish for the mirror reason. The scheduled release times sit on every economic calendar precisely because the distribution of possible reactions is wide around them.