Readings Scott Gerlach. 21 Mar 2000. Every six to eight weeks. The Federal Reserve convenes its Open Market Committee eight times a year to set short-term interest rate targets.
Monetary policy has other goals, as well.
During the deep financial crisis of a year ago, for instance, the Fed eased three times in quick succession to provide liquidity to U.S. financial markets, preventing a more marked meltdown. The FOMC comprises Chairman Alan Greenspan, the Fed Board governors and a rotating group of regional Fed bank presidents. FOMC members review current economic data, financial market conditions and future expectations to decide whether monetary policy is too easy, too tight or just right. By adding or draining reserves from the banking system, the Fed keeps federal funds close to its official target rate. Movements in the federal funds rate do influence longer-term interest rates, but less so further out the maturity spectrum.