When’s the next Federal Reserve meeting? What to expect — and how it affects your finances
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The Federal Reserve meets for its seventh two-day rate-setting session of 2024 on Wednesday, November 6, and Thursday, November 7, 2024.
At the end of its Federal Open Market Committee session on September 18, 2024, the Fed announced a cut to the federal funds target interest rate to a range of 4.75% to 5.00%. It marks the first time the Fed’s lowered rates since 2020 after holding the benchmark unchanged after eight previous meetings 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.
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, loans, mortgages and other financial products.
The Federal Open Market Committee meets next on Wednesday, November 6, and Thursday, November 7, 2024.
September FOMC meeting recap: Fed lowers benchmark rate for first time since March 2020
At the conclusion of its sixth rate-setting policy meeting of 2024 on September 18, 2024, the Federal Reserve announced it was lowering the federal funds target interest rate by 50 basis points to a range of 4.75% to 5.00% — the first cut since the Fed began raising rates in March 2022 — from a 23-year high of 5.25% to 5.50%.
A half-point cut isn’t typical of the Fed’s decisions, which historically call for measured quarter-point reductions, but points to an urgency in keeping the economy healthy, easing a slowdown in the labor market and averting a recession.
In its post-meeting statement, the Federal Reserve said it was lowering the target range “in light of the progress on inflation and the balance of risks,” acknowledging it’s “gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”
Economists estimate at least two additional rate cuts this year with an additional four cuts anticipated in 2025.
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 raises the federal funds rate when the economy is strong in an attempt to slow borrowing and tame inflation:
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A higher Fed rate means you’ll find increased annual percentage yields (APYs) on deposit accounts like certificates of deposit, high-yield savings accounts and money market accounts, helping you to earn more interest on your savings.
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But it also means you’ll pay higher interest to borrow money through financial products like personal loans and credit cards. Mortgage and home loan rates don’t follow the Fed rate as closely, yet when the Fed increases the benchmark rate, mortgage rates also tend to rise.
The Fed decreases the federal funds rate when the economy is sluggish, making it cheaper for you to borrow money:
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A lower Fed rate means you’ll pay less interest on new personal loans, and monthly repayments on variable loans like adjustable rate mortgages and credit cards can become more affordable.
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But it also means lower APYs on deposit accounts like certificates of deposit, high-yield savings accounts and money market accounts, decreasing your earning potential on savings balances.
Dig deeper: The long-awaited Fed rate cut: 5 ways lower rates affect your wallet
What to expect at the Fed’s November policy meeting
It’s widely expected the Federal Reserve will announce an additional cut to the federal funds rate at its next policy meeting on November 6 and November 7, 2024. As of October 12, the CME FedWatch Tool, which measures market expectations for Fed fund rate changes, projects an 85% chance the Fed will cut rates by a quarter percentage point to a range of 4.50% to 4.75% at its November meeting.
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 October 4 showed much stronger job growth than projected and a drop in the unemployment rate. Employers added 254,000 new jobs to payrolls in September, more than the 150,000 expected, with the unemployment rate down to 4.1% from 4.2% in August.
The fresh employment data is good news for the economy amid positive twin inflation reports. The consumer price index released on October 10 showed inflation cooling to its lowest level since February 2021, with a 2.4% year-over-year increase in consumer prices in September, down from 2.5% year over year in August and closer to the Fed’s 2% target.
The producer price index released on October 11 reported no change in wholesale prices — or the prices manufacturers pay to producers of goods and services — in September from August, together with consumer pricing data, pointing to easing inflation that peaked two years ago and paving the way for the Fed to make another quarter-point cut in November.
At a conference in Nashville on September 30, Federal Reserve Chair Jerome Powell said “the economy is in solid shape,” and that the Federal Reserve “intend(s) to use our tools to keep it there,” making its decisions “meeting by meeting.” He added, “This is not a committee that feels like it’s in a hurry to cut rates quickly.“
The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on Thursday, November 7, 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 September 17 and September 18, 2024:
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January 30–January 31, 2024
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March 19–March 20, 2024
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April 30–May 1, 2024
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June 11–June 12, 2024
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July 30–July 31, 2024
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September 17–September 18, 2024
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November 6–November 7, 2024
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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.
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:
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Federal Reserve Bank of Atlanta
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Federal Reserve Bank of Boston
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Federal Reserve Bank of Chicago
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Federal Reserve Bank of Cleveland
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Federal Reserve Bank of Dallas
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Federal Reserve Bank of Kansas City
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Federal Reserve Bank of Minneapolis
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Federal Reserve Bank of New York
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Federal Reserve Bank of Philadelphia
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Federal Reserve Bank of Richmond
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Federal Reserve Bank of San Francisco
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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:
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Boston, Philadelphia and Richmond, Va.
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Cleveland and Chicago
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Atlanta, St. Louis and Dallas
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Minneapolis, Kansas City, Mo. and San Francisco
2024 FOMC members
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Jerome H. Powell, Board of Governors, Chair
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John C. Williams, New York, Vice Chair
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Michael S. Barr, Board of Governors
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Michelle W. Bowman, Board of Governors
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Lisa D. Cook, Board of Governors
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Philip N. Jefferson, Board of Governors
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Adriana D. Kugler, Board of Governors
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Christopher J. Waller, Board of Governors
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Thomas I. Barkin, Richmond
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Raphael W. Bostic, Atlanta
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Mary C. Daly, San Francisco
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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 4.75% to 5.00%. 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 September 18, 2024, the Fed lowered its benchmark funds rate for the first time in four years after holding the rate at a 23-year high eight consecutive times in an attempt to tame mounting inflation, marking 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
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Federal Reserve Act, Federal Reserve. Accessed April 29, 2024.
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Federal Open Market Committee, Federal Reserve. Accessed May 25, 2024.
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The Dual Mandate and the Balance of Risks, Federal Reserve. Accessed April 29, 2024.
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The History and Future of the Federal Reserve’s 2 Percent Target Rate of Inflation, Council on Foreign Relations. Accessed April 29, 2024.
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Employment Situation Summary, U.S. Bureau of Labor Statistics. Accessed October 7, 2024.
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Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed October 11, 2024.
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Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed October 14, 2024.
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CME FedWatch Tool, CME Group. Accessed October 21, 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.