FOMC

The FOMC most commonly referred to as the Fed is a group that represents the Federal Reserve System. Their primary responsibility is to regulate the countries monetary policy. The chairman of the Fed (Ben Bernanke), is appointed by the government and is considered one of the world experts on the economy. When the Fed Chairman is discussing anything with the market, he has the ability to create swings in the stock market as his opinion on the state of the economy can be very influential.

The FOMC is made up of a group of ten voting members and five alternate members who must vote on any changes to the Fed policy. Their role is to set the rates for which banks borrow money from the Federal Reserve, often referred to as the Fed Funds Rate and the Fed Discount Rate.
The FOMC meets on average eight times per year, as they raise or lower the Fed Funds rate, banks will typically follow suit and raise the prime rate, which can impact the interest rate on credit cards, auto loans, home equity loans and variable rate mortgages. Changes to the Fed Funds or Fed Discount rate have no direct effect on mortgage rates, as they are not tied into the same market. The FOMC primary goal is to help the economy maintain a level of growth without allowing inflation to become too high.

 

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Rates, News & Advice Articles

September 1, 2010

The stock market got into rally mode today to start the month of September with a bang. Surging by over 200 points in heavy trading as investors rallied into equity positions. The strong rally in the DOW follows a steady decline of the DOW in the past 60 days as the “double dip” recession... 

August 27, 2010

The stock market finally caught a relief rally on Friday, as the DOW jumped well over 100 points on optimism from a reassuring speech from Fed Chairman Ben Bernanke. The DOW was able to get back above the 10,000 point market as investors took advantage of lower equity prices across the board on the market.... 

August 23, 2010

The markets strong start lost momentum over the course of trading on Monday and the market ended up dropping nearly forty points in trading. The dip follows a swing of nearly 100 points in light trading on Monday as investors pulled back when he market was up nearly fifty points when the market opened... 

August 19, 2010

Jobs are certainly the largest component to any economy and has the potential to drive markets sharply. Today, we witnessed another example of the fallout from the employment sector as unemployment claims jumped to their highest levels in the last nine months, news that quickly led to a dramatic sell-off...