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 second two-day rate-setting session of 2025 on Tuesday, March 18, and Wednesday, March 19, 2025.

At the end of its Federal Open Market Committee session on January 29, 2025, the Fed announced holding the federal funds target interest rate steady at a range of 4.25% to 4.50%. It marks the first time the Fed’s paused a rate change since its three back-to-back cuts in September, November and December, dropping the Fed rate by a full percentage point in its continued focus on getting the inflation rate closer to an average 2%.

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.

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, January 28, and Wednesday, January 29, 2025.

January FOMC meeting recap: Fed holds benchmark rates unchanged

At the conclusion of its first rate-setting policy meeting of 2025 on January 29, 2025, the Federal Reserve announced it was leaving the federal funds target interest rate at 4.25% to 4.50%, this after cutting the Fed rate by a jumbo half point in September 2024, followed by a quarter-point cut in November and another quarter-point cut in December.

In its post-meeting statement, the Federal Reserve said it was maintaining the target range in its continuing effort to tame inflation. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid,” the Fed said in its statement.

“In considering the extent and timing of additional adjustments,” the Fed said it would “carefully assess incoming data, the evolving outlook, and the balance of risks.”

Policymakers estimate just two additional cuts in 2025, down from four cuts projected after Sept.’s meeting — though in addition to mixed economic signals that include stubborn inflation and strong job growth, the impacts of a Trump presidency leave the market uncertain as to how deep the cuts to expect, and some economists predict the Fed will hold off on additional changes until May.

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, personal 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:

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: 5 ways lower rates can affect your wallet

What to expect at the Fed’s next policy meeting: March 18–19, 2025

While it’s too soon to predict what the Federal Reserve will decide at its next policy meeting on March 18 and March 19, 2025, traders are already projecting an 92% chance that the Fed keeps rates unchanged at 4.25% to 4.50%, according to CME FedWatch.

Economists are keeping a close eye on inflation and labor reports amid speculation as to timing of future cuts to the Fed rate, with inflation 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.

Fresh jobs data released on February 7 from the Bureau of Labor Services showed unemployment falling to 4% in January, down from 4.1% in December. Employers appear to be slowing the pace of hiring, adding 143,000 jobs to payrolls — less than the 170,000 expected by economists. While the number of added roles came in significantly lower than December’s strong gain of 307,000, BLS saw no discernible effect of California’s wildfires or severe winter weather in January on employment.

New inflation readers due this week are expected to show continued slowing, yet sticky inflation. The consumer price index released on January 15 — an important indicator of inflation that measures the prices average Americans pay for goods and services — showed consumer prices rising 0.2% from November to an annual rate of 2.9% for December, the third consecutive month inflation has edged higher, largely driven by gas and food prices. The producer price index released a day earlier on January 14 reported a modest 0.3% increase in wholesale prices in December, rising 3.3% year over year, up from 3% in November.

At a post-meeting press conference on January 29, Federal Reserve Chair Jerome Powell said the central bank would need to see “real progress on inflation or some weakness in the labor market before we consider making adjustments.”

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on Wednesday, March 19, 2025, at 2 p.m. ET.

🗓️ 2025 FOMC meeting schedule

The 2025 meeting schedule for the FOMC began on January 28, with its next session scheduled for March 18 and March 19, 2025:

• 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

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.

🗓️ 2024 FOMC meeting schedule

The 2024 meeting schedule for the FOMC began on January 30, 2024, concluding the year with its final rate-setting session in December:

• 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

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

2025 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

• Austan D. Goolsbee​, Chicago

• Susan M. Collins, ​​Boston

• Alberto G. Musalem, ​St. Louis

• ​​Jeffrey R. Schmid​​, Kansas City

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

Learn more about the Federal Reserve, its members and rates that affect your finances. And take a look at our growing library of personal finance guides that can help you save money, earn money and grow your wealth.

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 4.25% to 4.50%. 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 January 29, 2025, the Fed kept its benchmark funds rate unchanged for the first time since September 2024, continuing a policy shift that focuses on improving 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 December 18, 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 February 8, 2025.

• Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed January 15, 2025.

• Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed January 15, 2025.

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.