There are certain financial data that must be followed daily while trading in the Forex market. It is very important to analyze the data at the right time and with the right methods in order to turn investments into profit. FOMC meetings and the decisions taken at FOMC are also one of the most important economic data that makes forex transactions successful.
What is FOMC?
The Federal Open Market Committee is the most important financial part of the Reserve System in America that creates monetary policies.
If we look at the organizational structure of the FOMC, we can say that it consists of the president, vice president, and members. The chairman of the FOMC is the chairman of the US Federal Reserve (FED), the chairman of the Board of Governors, and the vice-chairman of the Federal Reserve Bank of New York (FRB) is a permanent member. It consists of 12 members in total. 7 of these members are composed of the board of governors appointed by the USA president. The Board of Governors is one of the most important and effective working units of the FED. As a result of its powers, it has a structure that monitors and controls the entire system. The remaining 5 members consist of the heads of the federal reserve banks. The leaders of the 11 states, especially the head of the New York central bank, take turns.
When does the FOMC meet?
The FOMC meets eight times a year in the US state of Washington. All presidents attend the meeting, and 7 members of the board of governors and 5 other central bank presidents. However, only 12 members have voting rights.
FOMC Meeting Minutes
The meeting records (FOMC Minutes) are announced three weeks after the FED meetings. It is very important as the minutes of the decisions taken at the last meeting are published.
Impact of FOMC on markets
The United States of America is one of the most important countries globally, with a population of over 320 million and a GDP exceeding $18 trillion. From a commercial point of view, it is a target market followed closely by other countries with a huge import volume and a high source of foreign capital. The US economy can directly affect the entire world economy and play a decisive role in the economy.
At the FOMC meetings, opinions on the macroeconomic outlook, economic measures to be taken, information on the direction and date of the interest rates, and the general course of the economy for future periods are taken.
After the decisions taken at the meeting, rapid changes occur in the markets, especially in the parities that affect the US dollar. Investors try to turn price changes into an advantage by directing their positions on the threshold of the data they follow. That’s why FOMC meetings, decisions taken at FOMC are extremely important for traders.
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