The FOMC is a multi-purpose component of the Federal Reserve System and is tasked with a few key functions, such as:

• Monetary Policy Formulation: The primary function of the FOMC is to formulate the nation's monetary policy. This involves decisions on interest rates and other tools to achieve the dual mandate of maximum sustainable employment and stable prices
• Setting Interest Rates: One of the FOMC's most impactful roles is setting the federal funds rate, which influences short-term interest rates throughout the economy. Changes in the federal funds rate can affect borrowing costs, spending, and investment
• Economic Assessment: The committee continually assesses economic conditions, reviewing data on inflation, employment, GDP growth, and other indicators. This assessment informs decisions on whether to tighten, loosen, or maintain the current monetary policy stance
• Forward Guidance: The FOMC provides forward guidance to the public, indicating its expected future policy actions based on economic projections. This guidance helps businesses, investors, and consumers make informed decisions
• Financial Stability Oversight: While not the primary regulator for financial stability, the FOMC considers potential risks to financial stability in its policy decisions. It collaborates with other regulatory bodies to address systemic risks

FOMC Meetings

The FOMC holds regular meetings to assess economic conditions and set monetary policy.

During these meetings, members discuss data on inflation, employment, and GDP growth.

Decisions on interest rates and other policy tools are made, impacting financial markets globally.

After each meeting, detailed minutes are released, providing insights into the committee's discussions and the rationale behind its decisions.

These minutes are closely scrutinized by investors, economists, and policymakers for clues about future policy directions, offering transparency into the FOMC's decision-making process.

The Federal Reserve website regularly updates the schedule of FOMC meetings for analysts and investors to keep track of the Fed’s activity.

Effects On Asset Prices

Interest rate changes can greatly affect the capital markets, such as stock, forex, and bond markets. 

Bonds are the asset class that is most affected by interest rate changes. For instance, high interest rates set by the FOMC make bonds very attractive due to their stable and predictable nature.

Interest rates also greatly affect stock performance. When interest rates rise, borrowing becomes more expensive and investors choose to shy away from speculative equities, placing most of their capital in fixed-income securities, such as bonds, bills, and notes. 

Therefore, when interest rates rise, stock market performance tends to stagnate or fall, and vice versa. Access to cheap capital is the breeding ground for speculative investments, which can lead to asset bubbles. 

As for the forex market, higher interest rates can increase the strength and lower inflation of a particular currency, which affects its performance in the global currency exchange markets. 

• The Federal Open Market Committee, or FOMC, is an important part of the Federal Reserve System, which oversees the monetary policy of the United States
• The FOMC meets on a regular basis, at least 8 times a year to discuss interest rates, economic stability, and global macroeconomic trends
• FOMC minutes are closely scrutinized by analysts and investors, as interest rate changes and forward guidance greatly affect asset performance
• The objectives of the FOMC is to ensure price stability and curb inflation by formulating the monetary policy of the United States