FOMC Explained: How Federal Reserve Decisions Move Every Market

The Federal Open Market Committee (FOMC) is the most important group of people in financial markets. Here's everything traders need to understand: **What is the FOMC?** The FOMC sets US interest rates. They meet 8 times per year. Their primary tools: - Federal Funds Rate (overnight lending rate) - Forward guidance (language about future policy) - Dot plot (each member's rate forecast) - Balance sheet management (QE/QT) **Why do FOMC decisions move all markets?** US interest rates affect the cost of money globally. Higher rates: - Strengthen USD (higher yield attracts capital) - Pressure equities (higher discount rate reduces present value of future earnings) - Pressure gold (higher real yields raise the opportunity cost of holding non-yielding gold) **The full FOMC event timeline:** - 2:00 PM EST: Statement released - 2:30 PM EST: Press conference begins - 2:30–3:30 PM EST: Chair Q&A (most market-moving) Have you ever traded an FOMC announcement? What was your biggest lesson from it?