Federal Open Market Committee (FOMC).
In plain English
The FOMC is the part of the Federal Reserve that decides interest-rate policy. It meets eight times a year and votes on a target for the federal funds rate, the rate banks charge each other overnight. That single decision flows through to what banks pay on savings, what cards and loans charge, and the general cost of money in the economy. When the news says the Fed raised or cut rates, it means the FOMC voted to move that target.
01Why it matters
Almost every rate you pay or earn traces back to FOMC decisions. Following what the committee signals about future moves is how you anticipate where savings and borrowing rates are heading.
02The math, step by step
At its meetings the FOMC sets a target range for the federal funds rate. If it moves that range up by a quarter point, banks tend to raise card APRs and, over time, adjust savings rates, because their own cost of money just went up.
03What this is NOT
The FOMC is not the entire Federal Reserve. It is the specific committee within the Fed that sets rate policy. The Fed also supervises banks and runs the payment system, which are separate functions.
04Receipts
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