The policy-making arm of the Federal Reserve is the Federal Open Market Committee (FOMC). The Committee meets eight times per year. Following FOMC meetings, a statement is issued indicating whether the fed funds target rate has been changed and assesses the risks to price stability and sustainable economic growth in the foreseeable future. Changes in the target rate can affect interest rates from the short- to the long-term and eventually lead to changes in economic behaviour.
The meetings of the FOMC are held on Tuesdays with the statement released at 2:15 p.m. The first and the fourth meetings of the year are spread over two days, leading to a statement on the Wednesday at 2:15 p.m. The Fed can move rates between meeting dates, if it so chooses.
The fed funds rate is the interest rate at which depository institutions lend their balances at the Federal Reserve to other institutions overnight. An objective of the Federal Reserve is for the fed funds rate to remain near the target rate. On a day-to-day basis the Federal Reserve will add or subtract funds from the system through overnight system repurchase agreements to keep the fed funds rate around target.
