What does the FOMC do?
The FOMC is made up of the Federal Reserve Board of Governors and a rotating group of regional Reserve Bank presidents. At each meeting, the committee votes on the target range for the federal funds rate β the interest rate at which banks lend to each other overnight, and the anchor for borrowing costs across the entire US economy.
Alongside the rate decision, the FOMC publishes a policy statement explaining its reasoning, and four times a year it releases the Summary of Economic Projections β commonly known as the "dot plot" β showing where each committee member expects rates to be in future years.
Why does FOMC matter for forex?
Interest rates are the single biggest driver of currency valuations: capital flows toward currencies offering higher returns. When the FOMC raises rates or signals further hikes, the US Dollar typically strengthens. When it cuts rates or signals a dovish shift, the Dollar typically weakens. Often the rate decision itself is already priced in by the market β the real volatility comes from the tone of the statement and the Fed Chair's answers during the press conference that follows.
The most volatile pairs during FOMC decisions are:
- EUR/USD β the world's most traded pair
- GBP/USD β typically large pip moves
- USD/JPY β highly sensitive to rate-differential shifts
- USD/CHF β safe-haven flows amplify moves
- AUD/USD β risk-on/risk-off proxy
- Gold (XAU/USD) β reacts inversely to USD strength and rate expectations
When does the FOMC meet?
The FOMC holds 8 scheduled meetings per year, roughly every six weeks. The rate decision and statement are released at 18:00 UTC (2:00 PM Eastern Time), followed about 30 minutes later by a live press conference with the Federal Reserve Chair.
Volatility often comes in two separate waves on FOMC day β first on the statement itself, then again during the press conference Q&A. Spreads widen and price can move 100β200+ pips across both windows, making this one of the highest-impact events on the entire economic calendar.
before every FOMC decision
Connect the free Forex Event Bot β receive a Telegram notification 5, 15 or 30 minutes before the FOMC decision drops. No app, no browser tab. Just a push to your phone.
Frequently asked questions
What happens to USD when the Fed raises rates?
Higher rates typically strengthen the US Dollar, since higher returns attract foreign capital into USD-denominated assets. The size of the move depends on whether the hike was expected and how hawkish the accompanying statement is.
What happens to USD when the Fed cuts rates?
Rate cuts typically weaken the US Dollar, as lower returns make USD assets less attractive relative to other currencies. A surprise cut or an unexpectedly dovish statement can trigger a sharp move.
What is the "dot plot"?
The dot plot is part of the Summary of Economic Projections, released four times a year. Each dot represents one FOMC member's anonymous forecast for where interest rates will be at future year-ends β traders use it to gauge the committee's forward guidance.
How can I get notified before an FOMC decision?
Connect the free @forex_event_bot on Telegram. It sends a push notification before the FOMC decision and every other major economic release. You choose the lead time: 5, 15 or 30 minutes before.