Streamed LIVE December 14, 2016, at 2:30 pm EST (US): Federal Open Market Committee (FOMC) Press Conference
- FRB: Press Release--Federal Reserve issues FOMC statement--December 14, 2016: "... the Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 percent."
- Dow hits record high after Fed raises interest rates | CNBC.com: "... the macro environment has changed dramatically." 3 more hikes likely in 2017.
- Dow Heading for 20,000, Stocks Rise, Gold Falls Ahead of Fed Rate Hike | DomainMondo.com
About the FOMC (source: federalreserve.gov):
The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services.
Structure of the FOMC
The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.
The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.
For more detail on the FOMC and monetary policy, see section 2 of the brochure on the structure of the Federal Reserve System and chapter 2 of Purposes & Functions of the Federal Reserve System. FOMC Rules and Authorizations are also available online.
2016 Committee Members
Janet L. Yellen, Board of Governors, Chair
William C. Dudley, New York, Vice Chairman
Lael Brainard, Board of Governors
James Bullard, St. Louis
Stanley Fischer, Board of Governors
Esther L. George, Kansas City
Loretta J. Mester, Cleveland
Jerome H. Powell, Board of Governors
Eric Rosengren, Boston
Daniel K. Tarullo, Board of Governors
Charles L. Evans, Chicago
Patrick Harker, Philadelphia
Robert S. Kaplan, Dallas
Neel Kashkari, Minneapolis
Michael Strine, First Vice President, New York
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