TeachMeFinance.com - explain Federal Open Market Committee (FOMC)
Federal Open Market Committee -- The group within the Federal Reserve
System that determines the direction of monetary policy. The open market
desk at the Federal Reserve Bank of New York implements that policy with
open market operations (the purchase or sale of government securities),
which influence short-term interest rates --especially the federal funds
rate--and the growth of the money supply. The committee is composed of
12 members, including the seven members of the Board of Governors of the
Federal Reserve System, the president of the Federal Reserve Bank of New
York, and a rotating group of four of the other 11 presidents of the regional
Federal Reserve Banks.
Federal Open Market Committee (FOMC) -- a 12-member committee consisting of the seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York is a permanent member while the other Federal Reserve Bank presidents serve on a rotating basis. The committee sets objectives for growth of money and credit that are implemented through purchases and sales of U.S. Government securities in the open market. The FOMC also establishes policy relating to Federal Reserve System operations in the foreign exchange markets.
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