Monetary Policy - Federal Open Market Committee (FOMC)

Introduction

The FOMC is the Federal Open Market Committee. This committee of the Federal Reserve Bank was formed in the 1930's and is responsible for setting interest rates in the US. In this section we look more closely at the work of the FOMC. We examine the sort of things the members of the committee have to consider when setting the level of interest rates.

• Explanation - a good starting point for finding out about the work that the committee does. A simple overall guide.
• Theories - more detail on some of the theories about inflation that are of particular importance when trying to cut inflation; monetary transmission mechanism, inflation forecasting, inflation targeting and so on.
• Worksheets - some worksheets to help you test your understanding of the work of the FOMC.
• Further work - other areas of economic theory that you may want to consider when looking at the control of inflation using monetary policy.