When’s the next Federal Reserve meeting? What to expect — and how it affects your finances

In this guide

The Federal Reserve meets for its eighth and final two-day rate-setting session of 2024 on Tuesday, December 17, and Wednesday, December 18, 2024.

At the end of its Federal Open Market Committee session on November 7, 2024, the Fed announced a cut to the federal funds target interest rate to a range of 4.50% to 4.75%. It marks the second time the Fed’s lowered rates this year in its continued focus on getting the inflation rate closer to an average 2%.

December’s meeting is expected to bring with it another cut to the Fed’s benchmark interest rate, affecting the way you borrow, save and invest.

If all the talk of high interest rates has left you wondering what the Fed’s committee does — or what the Federal Reserve even is, for that matter — here’s our primer on the Federal Reserve and what it means for your future finances.

Must read: How to prepare for an interest rate cut (and 4 money moves you should avoid)

What is the Federal Reserve — and why does it meet?

The Federal Reserve is the central bank of the United States and the anchor of the country’s financial system and economic health. It’s governed by a federal Board of Governors appointed by the president and confirmed by the U.S. Senate that’s in charge of fulfilling the responsibilities laid out in the Federal Reserve Act of 1913, most important among them to provide the nation with a safe, stable monetary and financial system.

The Federal Reserve Act has been amended a handful of times as the country’s grown and faced economic challenges. Key among them is a 1933 amendment that created the Federal Open Market Committee — or the FOMC — within the Federal Reserve, as well as a 1977 amendment establishing what’s referred to as the Fed’s dual mandate: “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

The Federal Open Market Committee, which is made up of the Board of Governors and regional Federal Reserve bank presidents, meets throughout the year to review how the economy is going, analyze risks to employment and inflation and authorize monetary policy, including how the country’s money supply is managed.

At these FOMC meetings, the committee also sets the federal funds target rate cited in its dual mandate. Called the Fed rate, this rate is the benchmark that influences what U.S. banks charge to borrow money and lend money to one another — and the interest rates you’re offered on deposit accounts, personal loans, mortgages and home equity loans.

The Federal Open Market Committee meets next on Tuesday, December 17, and Wednesday, December 18, 2024.

November FOMC meeting recap: Fed cuts rates by quarter point

At the conclusion of its seventh and penultimate rate-setting policy meeting of 2024 on November 7, 2024, the Federal Reserve announced it was lowering the federal funds target interest rate by 25 basis points to a range of 4.50% to 4.75% — two months after its jumbo half-point cut on Sept. 18.T

The Fed’s decision comes days after Donald J. Trump was elected 47th president of the U.S. and amid conflicting economic signals, with inflation at its lowest in more than four years yet weak employment growth.

In its post-meeting statement, the Federal Reserve said it was lowering the target range, citing “labor market conditions have generally eased, and the unemployment rate has moved up but remains low” while acknowledging a “somewhat elevated” inflation rate. “In considering additional adjustments,” the Fed said it would “carefully assess incoming data, the evolving outlook, and the balance of risks.”

Economists estimate another rate cut in December with additional cuts in 2025 — though with the impacts of a Trump presidency uncertain, it’s unclear how many or how deep the cuts to expect.

How the Federal Reserve affects your finances

The federal funds rate — or Fed rate — is the benchmark rate that sets the outlook on the state of the country’s economy, and it affects the interest rates you get on deposit accounts, loans, mortgages and other financial products.

Generally, the Fed decreases the federal funds rate to encourage economic activity by making it cheaper for you to borrow money. On the other hand, the Fed raises the federal funds rate when the economy is strong in an attempt to slow borrowing and tame inflation.

Positive impacts of rate cuts

If you’re thinking about taking out a loan or carrying credit card debt, you may see some relief in the months following a rate cut:

• Credit card APRs may decrease a few billing cycles, though card companies often take their time lowering rates

• Mortgage rates may trend lower, which can help reduce your monthly payments if you have an adjustable-rate mortgage or plan to buy a home

• Personal loans, auto loans and other forms of borrowing could become more affordable as their interest payments become smaller

In addition to its impact on borrowing, Fed rate cuts tend to have a positive impact on the stock market because:

• Companies can borrow money more cheaply to grow their businesses

• Lower savings APYs often encourage investors to move money from cash into stocks

• Dividend-paying stocks from stable companies like utilities become more attractive as an alternative to high-yield savings

Negative impacts of the rate cut

If you rely on passive income from savings products, you’ll likely see these changes following a rate cut:

• High-yield savings accounts (HYSAs) will see rates drop within weeks after a Fed rate cut, though they’ll still offer significantly better returns than traditional savings accounts

• Certificate of deposit (CD) rates for new accounts will decline, though existing CDs maintain their locked-in rates until maturity

• Money market accounts (MMAs) typically adjust rates downward shortly after Fed cuts, since they’re designed to stay competitive with current market conditions

Dig deeper: The long-awaited Fed rate cut: 5 ways lower rates affect your wallet

What to expect at the Fed’s next policy meeting: December 17–18, 2024

It’s too early to predict what the Federal Reserve will decide at its next policy meeting on December 17 and December 18, 2024, though many experts expect the Fed will announce additional cuts to the federal funds rate in the year to come.

Economists are keeping a close eye on inflation and labor reports amid speculation as to timing of future cuts to the Fed rate. Signs of cooling inflation paved the way for September’s first rate cut in four years, with economic data indicating a continued decline from a peak of 9.1% in June 2022 to rates that have ranged from 2.5% and 4% since May 2023.

An eagerly awaited jobs report released November 1 showed hiring slowing substantially, with employers adding only 12,000 jobs to payrolls in October — a far lower total than the 105,000 anticipated by Bloomberg after accounting for Hurricanes Helene and Milton and the ongoing Boeing strike. Employment figures were revised for the previous two months by 112,000, raising concerns about a cooling job market. The unemployment rate held at 4.1%.

Against the weaker-than-expected jobs report came a one-two punch of new economic data for October, a week after a U.S. presidential election in which the economy factored largely into voter concerns. The consumer price index released on November 13 showed prices of consumer goods and services rising 2.6% year over year, while the producer price index released on November 14 reported a similar increase in wholesale prices — or the prices manufacturers pay to producers of goods and services. Both reports are a sign of stalled progress in the fight to tame post-pandemic inflation, keeping a Fed rate cut on the table for December.

At a November 14 speech to business leaders, Federal Reserve Chair Jerome Powell said the Fed isn’t “in a hurry to lower rates,” citing strong economic growth: “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on Wednesday, December 18, 2024, at 2 p.m. ET.

🗓️ 2024 FOMC meeting schedule

The 2024 meeting schedule for the FOMC began on January 30, with the next session scheduled for December 17 and September 18, 2024:

• January 30–January 31, 2024

• March 19–March 20, 2024

• April 30–May 1, 2024

• June 11–June 12, 2024

• July 30–July 31, 2024

• September 17–September 18, 2024

• November 6–November 7, 2024

• December 17–December 18, 2024

The Federal Open Market Committee meets eight times a year for two days — typically Tuesdays and Wednesdays — with additional meetings added to the schedule as the economy or financial conditions require. Outcomes of these meetings, including changes to the federal funds target rate, are announced to the public at the conclusion of the FOMC meeting, with meeting minutes released about three weeks later.

🗓️ 2025 FOMC meeting schedule

• January 28–January 29, 2025

• March 18–March 19, 2025

• May 6–May 7, 2025

• June 17–June 18, 2025

• July 29–July 30, 2025

• September 16–September 17, 2025

• October 28–October 29, 2025

• December 9–December 10, 2025

What is the Federal Open Market Committee?

The FOMC is the committee within the Federal Reserve that makes decisions around monetary policy and the open market — the buying and selling of treasury bills and securities that regulate the country’s money supply.

The Federal Open Market Committee is made up of the seven members of the Federal Reserve Board of Governors and five presidents of the 12 Federal Reserve district banks:

• Federal Reserve Bank of Atlanta

• Federal Reserve Bank of Boston

• Federal Reserve Bank of Chicago

• Federal Reserve Bank of Cleveland

• Federal Reserve Bank of Dallas

• Federal Reserve Bank of Kansas City

• Federal Reserve Bank of Minneapolis

• Federal Reserve Bank of New York

• Federal Reserve Bank of Philadelphia

• Federal Reserve Bank of Richmond

• Federal Reserve Bank of San Francisco

• Federal Reserve Bank of St. Louis

These presidents act as bank CEOs responsible for setting, supervising and maintaining the monetary policy of their appointed regions — called districts. Created by the Federal Reserve Act of 1913, districts within the Federal Reserve System work together to manage the country’s money supply and how commercial banks are funded.

Who attends the FOMC meetings?

The seven members of the Federal Reserve’s Board of Governors and all 12 regional Federal Reserve bank presidents are welcome to attend the meetings and participate in discussions, but only Federal Open Market Committee members can vote on monetary policy.

Voting FOMC members always include the president of the Federal Reserve Bank of New York and one each from the following four bank groups, based on a rotating schedule:

• Boston, Philadelphia and Richmond, Va.

• Cleveland and Chicago

• Atlanta, St. Louis and Dallas

• Minneapolis, Kansas City, Mo. and San Francisco

2024 FOMC members

• Jerome H. Powell, Board of Governors, Chair

• John C. Williams, New York, Vice Chair

• Michael S. Barr, Board of Governors

• Michelle W. Bowman, Board of Governors

• Lisa D. Cook, Board of Governors

• Philip N. Jefferson, Board of Governors

• Adriana D. Kugler, Board of Governors

• Christopher J. Waller, Board of Governors

• Thomas I. Barkin, Richmond

• Raphael W. Bostic, Atlanta

• Mary C. Daly, San Francisco

• Loretta J. Mester, Cleveland

Frequently asked questions: The Fed, the FOMC and your money

Learn more about the Federal Reserve, its members and rates that affect your finances.

What does the Federal Reserve do?

The Federal Reserve is the central bank of the U.S. that sets monetary policy and regulates the financial system to support a healthy economy for Americans and businesses. Created by Congress in December 1913, It has a mandate to increase employment and stabilize prices in order to keep inflation in check.

Among its main responsibilities are determining benchmark interest rates that affect the way consumers and businesses earn and borrow money, moderating the money available for banks to borrow and lend among themselves and regulating the open market that allows buyers and sellers to trade goods and services.

Its decisions influence how much money and credit is available to Americans and businesses, which affects how we buy homes and borrow money, grow our savings and retirement funds and take on new employment within a healthy job market.

What is the current federal funds rate?

The current federal funds target interest rate is 4.50% to 4.75%. The Federal Reserve’s Federal Open Market Committee meets eight times a year to set this benchmark, announcing any changes to the public at the conclusion of its meeting.

At its last rate-setting policy meeting, on November 7, 2024, the Fed lowered its benchmark funds rate by a quarter point for the second time in four years, continuing a policy shift that focuses on lowering borrowing costs, easing the job market and warding off economic slowdown.

What is the inflation rate?

The annual inflation rate is a measurement that reflects how quickly the prices of goods and services have increased over a year, expressed as a percentage. It’s important because inflation affects many aspects of the economy, from decreasing the purchasing power of the dollars in your wallet, to increasing the interest rates you pay to borrow money, to increasing the prices you pay on food, gas, housing, electricity and other basic needs.

The Federal Reserve is focused on keeping the inflation rate to an average 2% — a rate it’s determined as ideal for keeping employment high and prices low. A 2% inflation rate means that the goods and services you paid $1 for a year ago would now cost you 2% more — or $1.02.

See how inflation works with the U.S. Bureau of Labor Statistics CPI Inflation Calculator, which bases its calculations on the Consumer Price Index, a widely used indicator for inflation.

How long are Federal Reserve terms?

Members of the Federal Reserve Board of Governors are appointed by the U.S. president and confirmed by the Senate for terms of 14 years. The Board of Governors chair and vice chair serve shorter terms of four years.

Tradition holds that members of the Federal Reserve’s Federal Open Market Committee elect the Board of Governors chair as FOMC chair and the president of the Federal Reserve Bank of New York as FOMC vice chair.

Sources

• Federal Reserve Act, Federal Reserve. Accessed April 29, 2024.

• Federal Open Market Committee, Federal Reserve. Accessed May 25, 2024.

• The Dual Mandate and the Balance of Risks, Federal Reserve. Accessed April 29, 2024.

• The History and Future of the Federal Reserve’s 2 Percent Target Rate of Inflation, Council on Foreign Relations. Accessed April 29, 2024.

• Employment Situation Summary, U.S. Bureau of Labor Statistics. Accessed November 1, 2024.

• Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed November 14, 2024.

• Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed November 15, 2024.

About the writer

Kelly Suzan Waggoner is personal finance editor at AOL. Before joining AOL, Kelly was managing editor at Bankrate and editor-in-chief at Finder, where she led a team focused on helping people to make unfamiliar financial decisions around banking, lending, credit cards, investments and more. Kelly’s expertise has been featured in Nasdaq, Lifehacker and other publications. Today, she’s dedicated to empowering those planning for, newly entering or fully enjoying retirement to get the most out of their finances — whether that’s saving money, managing debt, maximizing rewards or growing their wealth.