10. What is the FOMC, and what does it do? FOMC stands for the Federal Open Market Committee. The FOMC consists of twelve members--the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the other eleven Reserve Bank presidents. The four Reserve Bank presidents serve one-year terms on a rotating basis. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in discussions, and contribute information about economic conditions in their District. The purpose of the FOMC is to determine the nation’s monetary policy. The FOMC holds eight regularly scheduled meetings each year in Washington, D.C. At these meetings, the FOMC reviews economic and financial conditions and sets monetary policy. The term “monetary policy” refers to the actions taken by a central bank, such as the Federal Reserve, to help encourage a healthy economy. The actions taken influence the availability and cost of money and credit, which affect a range of economic variables, including output, employment, and prices of goods and services. At each of its meetings, the FOMC decides whether or not to change its target for the federal funds rate, and if so, by how much. The FOMC also issues a statement after each meeting explaining its decision, and these statements contain some important information about the FOMC’s evaluation of the economy. Learn more.