The Federal Reserve sets interest rates through eight scheduled Federal Open Market Committee meetings a year, where twelve voting officials decide the target range for the federal funds rate after weighing inflation, employment, and business conditions across the country. At its most recent meeting on April 28–29, 2026, the committee held that range at 3.50 to 3.75 percent.1Federal Reserve. Federal Reserve Issues FOMC Statement Fed meeting interest rates don’t land on any bill you pay directly, but they shape almost every rate that does.
Who Actually Votes on the Rate
The FOMC has twelve voting members. Seven are the members of the Board of Governors, each nominated by the President and confirmed by the Senate. The remaining five seats belong to presidents of the twelve regional Federal Reserve Banks.2Office of the Law Revision Counsel. 12 US Code 263 – Federal Open Market Committee; Creation; Membership; Regulations Governing Open-Market Transactions The New York Fed president holds a permanent voting seat because that bank’s trading desk executes the committee’s decisions. The other eleven regional presidents rotate through the four remaining slots on one-year terms.3Federal Reserve. Federal Open Market Committee – Rules of Organization
All twelve regional presidents attend every meeting and take part in the discussion, whether or not they hold a vote that year. That mix gives the committee both centralized oversight from the Washington-based governors and on-the-ground perspective from every region.
When the Meetings Happen in 2026
The FOMC holds eight regularly scheduled two-day meetings a year.4Federal Reserve. Federal Open Market Committee Meeting Calendars and Information The 2026 dates are:
- January 27–28
- March 17–18 (with economic projections)
- April 28–29
- June 16–17 (with economic projections)
- July 28–29
- September 15–16 (with economic projections)
- October 27–28
- December 8–9 (with economic projections)
Four of those meetings include the Summary of Economic Projections, which contains the closely watched dot plot. The committee can also hold unscheduled emergency sessions when conditions demand faster action.
What the Committee Looks at Before Voting
Fed staff economists brief the committee on the domestic and global economy at the start of each meeting. A specific set of indicators drives the vote.
Inflation
Inflation is the committee’s central benchmark. The Fed measures it using the Personal Consumption Expenditures price index, adopted formally in January 2012 with a target of 2 percent annual growth.5Federal Reserve Bank of Atlanta. The Fed and Inflation: Origins of the 2 Percent Target Rate Members also watch the Consumer Price Index and core PCE, which strips out volatile food and energy prices to show underlying trends.6Federal Reserve. Economy at a Glance – Inflation (PCE) Persistent inflation above 2 percent pushes the committee toward higher rates; readings below that level open the door to cuts.
The Labor Market
The unemployment rate and broader measures of hiring, wages, and labor force participation get nearly equal weight. A very tight job market can lift wages fast enough to feed price growth. Rising unemployment often signals that borrowing costs are too high and need to come down.
The Beige Book
About two weeks before each meeting, the Fed publishes the Beige Book, a compilation of observations from business contacts, economists, and market participants in all twelve Fed districts.7Federal Reserve Board. Beige Book Statistics describe last month; the Beige Book captures what people on the front lines are seeing right now.
The Dot Plot
At the four projection meetings, each participant submits individual forecasts for GDP growth, unemployment, inflation, and the appropriate federal funds rate over the next several years and the longer run.8Federal Reserve. What Is the Summary of Economic Projections? The rate forecasts appear as anonymous dots on a chart, each representing one official’s view of where rates should be at year-end.9Federal Reserve. Summary of Economic Projections The dot plot is often the most market-moving element of any meeting because it shows how many officials expect to raise, cut, or hold. A cluster shifting downward tells investors the committee is leaning toward cuts.
What the Rate Decision Actually Is
The committee votes on a target range for the federal funds rate, the interest rate banks and certain other financial institutions charge each other for overnight loans of reserves held at the Fed.10Federal Reserve Bank of Chicago. The Federal Funds Rate The range is typically a quarter of a percentage point wide, and it sits at 3.50 to 3.75 percent as of April 2026.1Federal Reserve. Federal Reserve Issues FOMC Statement Because nearly all short-term lending in the economy takes its cue from this rate, a quarter-point move reshapes borrowing costs for millions of households and businesses.
To keep the actual market rate inside the range, the Fed relies on two administered rates. The interest rate on reserve balances, or IORB, is what the Fed pays banks that park reserves at the central bank; it currently sits at 3.65 percent and pulls the market rate toward the middle of the range.11Federal Reserve Board. Interest on Reserve Balances The overnight reverse repurchase agreement facility sets a floor by offering money market funds and other eligible counterparties a risk-free overnight return from the Fed.12Federal Reserve. Overnight Reverse Repurchase Agreement Operations The New York Fed’s Open Market Trading Desk carries out these operations day to day.13Federal Reserve Bank of New York. Monetary Policy Implementation
The Statement, the Press Conference, and the Minutes
Voting happens at the end of the second day. Each of the twelve voting members votes to raise, lower, or hold the target range. Dissents are recorded in the public statement along with each dissenter’s reasoning, which tells markets how unified the committee is on direction.14Federal Reserve Bank of St. Louis. A History of FOMC Dissents
At 2:00 p.m. Eastern Time, the committee releases its formal policy statement describing the decision and the economic outlook behind it.15Federal Reserve. Federal Open Market Committee – April 28-29, 2026 FOMC Meeting The statement also carries forward guidance, language the committee uses to signal likely future direction. Investors adjust their behavior based on what the committee says it expects to do next.16Federal Reserve. What Is Forward Guidance, and How Is It Used in the Federal Reserve Monetary Policy?
Shortly after, the Fed Chair holds a live press conference. Reporters push on topics the written statement deliberately leaves vague, and a single phrase from the Chair can move stocks, bonds, and currencies within seconds.
Three weeks later, the Fed publishes detailed minutes of the meeting.4Federal Reserve. Federal Open Market Committee Meeting Calendars and Information The minutes capture the range of views expressed during the discussion, including which members pushed for a different outcome and why. Traders and economists comb them for clues about the next move, and the release can trigger its own round of market volatility weeks after the original decision.
What Fed Rate Decisions Mean for Your Money
The federal funds rate never appears on a bill, but it influences almost every rate you encounter.
Credit Cards and Variable-Rate Loans
Most credit cards and home equity lines of credit carry variable interest rates tied to the prime rate, which banks typically set at a fixed margin above the federal funds rate. As of early 2026, the prime rate sits at 6.75 percent.17Federal Reserve. H.15 – Selected Interest Rates (Daily) When the FOMC raises the target range by a quarter point, the prime rate moves up the same amount within days, and your card’s annual percentage rate follows. Rate cuts flow through the same way.
Mortgages
Mortgage rates are a different story. Because a typical mortgage lasts several years before being refinanced or paid off, lenders price them off longer-term Treasury yields rather than the overnight federal funds rate. Fed rates and mortgage rates can sometimes move in opposite directions. Inflation expectations, government borrowing, and global demand for safe assets all pull on long-term yields independently. A Fed cut doesn’t guarantee cheaper mortgages, and a hike doesn’t always make them more expensive, though over time the two tend to move in the same general direction.
Savings Accounts and CDs
Higher Fed rates generally mean better yields on savings accounts and certificates of deposit, because banks can earn more on their own reserves and pass some of that along. When the Fed cuts, banks typically lower what they pay on deposits. Opening a CD before an expected cut locks in the current yield for a fixed term regardless of what the committee does next.
Auto Loans and Other Consumer Debt
Auto loans, personal loans, and other consumer credit don’t track the federal funds rate as tightly as credit cards, but lenders still factor in their own cost of borrowing when setting rates. When the Fed raises, that cost goes up, and lenders pass at least some of it through. Your credit score, the loan term, and competition among lenders all shape the final number, but the Fed’s rate sets the baseline everyone else works from.