Federal Reserve Meets to Decide Interest Rates

Several times a year, the Federal Open Market Committee (FOMC) gathers to make a decision that ripples through the entire U.S. economy: setting interest rates.

The FOMC is a group of 12 officials responsible for the country's monetary policy.

Their primary mission is the "dual mandate," which aims to achieve maximum employment while maintaining price stability by keeping inflation near 2%.

To reach these goals, they adjust the federal funds rate—the interest rate banks charge each other for overnight loans.

If the economy is growing too fast, the Fed might raise rates to combat inflation.

Conversely, if the economy needs a boost, they might lower rates to encourage spending.

By operating independently of political influence, the Federal Reserve strives to make objective decisions that protect the long-term health of the economy for every American.