## Understanding FOMC: The U.S. Federal Open Market Committee

### What is FOMC and what does it do

If you are an investor or follow financial news, you will often encounter the term FOMC, especially during FOMC meetings. The (Federal Open Market Committee) is involved in making monetary policy decisions that significantly impact the money markets, bond markets (Bond), and foreign exchange markets (Forex).

FOMC is a body within the U.S. Federal Reserve consisting of 12 members responsible for guiding monetary policy through open market operations (Open Market Operations – OMOs) to achieve two main goals: maintaining price stability (measured by inflation rate) and supporting employment (measured by the non-farm employment rate).

When the FOMC sets new policy directions, it makes an official public announcement. Since the OMOs monetary policy directly influences interest rates and U.S. government bond yields, the U.S. bond market, which exceeds $51 trillion, is affected first, impacting global financial markets.

### Who manages the FOMC and other details

FOMC policy decisions depend on the data and considerations of each member, making it useful for investors to follow each member’s perspectives.

The structure of the FOMC includes 7 members from the Board of Governors of the Federal Reserve, 1 president from the New York Fed, and 4 other members chosen from other Federal Reserve districts. Each member serves a one-year term per meeting cycle.

As of the current FOMC (2023-2024), key members include:
- **Jerome H. Powell** - Chair of the FOMC, Board of Governors of the Federal Reserve
- **John C. Williams** - Vice Chair of the New York Fed
- **Michael S. Barr, Michelle W. Bowman, Lisa D. Cook, Philip N. Jefferson, Christopher J. Waller** - Board Governors
- **Austan D. Goolsbee, Patrick Harker, Neel Kashkari, Lorie K. Logan** - Federal Reserve district members
- **Adriana D. Kugler** - Board of Governors member

### FOMC Meeting Schedule and Dates

The FOMC holds 8 meetings annually, approximately every half month, to continuously monitor and evaluate policies. Meetings last 2 days, with results usually announced on the final day at 2:00 PM local time (02:00 AM Thai time).

For 2024, the FOMC meeting calendar is as follows:
- January 30-31
- March 19-20
- April 30 - May 1
- June 11-12
- July 30-31
- September 17-18
- November 6-7
- December 17-18

### FOMC Policy Tools

To achieve price stability and employment goals, the FOMC uses three monetary policy tools:

**1. Buying U.S. Treasury Bonds**
This policy injects liquidity into the financial system, often used to stimulate economic growth. However, it can lead to higher inflation and expansion of the Fed’s balance sheet.

**2. Selling U.S. Treasury Bonds**
This policy withdraws liquidity from the system. It is used when the economy is overheating, helping to curb inflation and reduce the size of the Fed’s balance sheet.

**3. Adjusting the Fed Funds Rate (FFR)**
The FFR is the overnight interest rate for banks borrowing from the Federal Reserve. When the FFR is high, banks borrow less, reducing money supply. Conversely, when the FFR is low, banks borrow more.

### Dot Plot - Future Policy Direction Indicator

In addition to monitoring weekly policy changes, investors should closely observe the **Dot Plot**, a graph showing each member’s projected interest rates in the future.

The Dot Plot is released along with the FOMC meeting minutes each time. Each dot on the graph reflects a member’s view on the appropriate interest rate in upcoming meetings. This graph helps investors clearly see the future interest rate outlook and potential policy shifts by the FOMC.

### Why FOMC is Important to Investors

When discussing the FOMC, it refers to the U.S. monetary policy committee, comparable to Thailand’s (กนง.) (Bank of Thailand’s Monetary Policy Committee). The FOMC’s decisions influence the global financial system through interest rate mechanisms and liquidity control. Therefore, investors operating in any market must regularly follow FOMC movements to stay updated on market changes across stock markets, gold markets, and others.