What is it?
The Federal Reserve (Fed) is charged by the Federal Reserve Act of 1913 with the task of setting monetary policy within the US Federal Reserve System. The FOMC is the most watched policy-making part of the Fed. They typically meet eight times a year. At each meeting, members discuss forecasts and economic conditions and set the Federal Funds Target Rate and the Discount Rate. The Target Rate is just that - a target. The Fed buys and sells securities on the open market in order to move the Federal Funds Target Rate set by the FOMC. The Federal Funds Rate is the rate at which depository institutions lend available funds to each other overnight, particularly to meet their reserve requirements.
The market pays very careful attention to minutes from the FOMC meetings, as well as to every public word spoken or written by any FOMC member or meeting attendee. It is easy to understand why, as the policies set by the FOMC have a huge impact on future interest rates and inflation trends.
| 
