This 12-member committee meets eight times a year to set guidelines for the Federal Reserve regarding the sale and purchase of government securities in the open market. Its chief importance for consumers is that the FOMC can adjust the federal funds rate and the federal discount rate. Banks set their rates based on the FOMC’s moves, and therefore the committee’s actions effectively ratchet consumer interest rates upward or downward. The committee is comprised of the seven members of the Board of Governors; the president of the Federal Reserve Bank of New York, and four of the presidents of the other 11 reserve banks.

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