Fed rate decision: how the FOMC sets rates and moves the dollar

The Fed rate decision is the moment the Federal Open Market Committee sets the target range for the federal funds rate, the rate at which banks lend each other money overnight. It is the biggest scheduled event for the dollar, and because US rates set the tone for borrowing costs far beyond the US, it moves every dollar pair at once. The rate itself is usually priced well before the day; the move tends to come from the statement, the projections and the Chair's answers.

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By Mike. Explanation updated 2 Oct 2026; the dates and moves below update with the research.

Fed rate decision in short

Next release: Wednesday, 28 October 2026At the usual time, see below. The exact moment appears here in the week itself.
Published by: Federal Reserve, Federal Open Market Committee
When: Eight scheduled meetings a year, each over two days. The statement comes at 2:00 in the afternoon New York time on the second day, and the Chair's press conference at 2:30. That is 20:00 and 20:30 in Amsterdam for most of the year, an hour earlier in the weeks in March and around the end of October when the US and Europe have changed their clocks on different dates. In 2026 the March and October meetings both fell in those weeks.
Currency: US dollar (USD)
Impact: High: one of the releases that can move the currency on its own
What is decided: The target range for the federal funds rate, usually moved in steps of 0.25 percentage points
Who decides: Twelve voters: the seven Fed governors, the New York Fed president and four other Reserve Bank presidents in rotation
Mandate: Maximum employment and stable prices, with 2% inflation on the PCE price index
Comes with: A statement at 2:00 New York time, a press conference at 2:30, and four times a year new projections

What the Fed rate decision contains

The decision comes as a short statement from the Federal Open Market Committee. It gives the new target range for the federal funds rate, a few paragraphs on jobs and inflation, and the vote. Half an hour later the Chair holds a press conference and takes questions.

Four times a year, in March, June, September and December, the decision comes with the Summary of Economic Projections. In it each participant gives a view on growth, unemployment, inflation and the federal funds rate for the end of the coming years. The chart of rate views, one dot per participant, is what the market calls the dot plot.

Twelve members vote, but all the Reserve Bank presidents attend and take part in the discussion. The committee holds eight scheduled meetings a year and can meet in between when it needs to.

Why the Fed moves the dollar

A higher federal funds rate makes holding dollars pay more, and US yields take their cue from it. When the market comes to expect more hikes or fewer cuts than before, money moves into the dollar. When it expects the reverse, the dollar tends to weaken.

Most decisions are priced well in advance. What moves the dollar is the part that was not: a changed phrase in the statement, dots that shift up or down, a dissent, or a remark from the Chair about the next meeting.

How to read a Fed rate decision

Start with what the market priced the day before. A cut that was fully expected can still lift the dollar if the statement or the dots suggest it may be the last one for a while.

Then put the statement next to the previous one, line by line. The Fed changes its wording with care, so a single new phrase about inflation or the jobs market can say more than the decision itself.

The first move on the statement is often not the one that lasts. The press conference half an hour later can confirm the message or soften it, and the dollar sometimes turns while the Chair is still talking.

What the US dollar did on the last release days

Measured on our own prices: the US dollar against the basket of the eight majors, from the London opening before the release to the one after it, so the release sits inside the window. Anything else that came out between those two openings is in it too, so a day with more news says less about this release alone.

Release	Amsterdam	Measured	USD vs basket
16 Sept 2026	20:00	16 Sept to 17 Sept	+0.42%

For scale: on an ordinary day the US dollar moves 0.23% against the basket from one London opening to the next, either way, on average over the 250 trading days since 14 Oct 2025.

The forecast, the figure itself and what it changed in our view of the currency are in the app, next to the research.

Questions about the Fed rate decision

What time is the Fed rate decision?

At 2:00 in the afternoon New York time, on the second day of the meeting, with the press conference at 2:30. In Amsterdam that is 20:00 and 20:30 for most of the year, an hour earlier in the weeks in March and around the end of October when the US and Europe change their clocks on different dates.

How often does the Fed meet?

The FOMC holds eight scheduled meetings a year, each over two days, and can meet in between when it needs to. Four of them, in March, June, September and December, come with new economic projections and the dot plot.

What is the Fed dot plot?

A chart in the Summary of Economic Projections in which each Fed participant marks where they think the federal funds rate should be at the end of each of the next few years. The market compares the middle of those dots with what it has priced, and a shift in the dots can move the dollar more than the decision.

What is the Fed's inflation target?

2% a year, measured by the annual change in the price index for personal consumption expenditures, PCE. The Fed's mandate is maximum employment and stable prices, so the jobs market weighs in every decision as well.

Why did the dollar fall after a Fed hike?

Because the hike was priced and the message around it was softer than the market had hoped. A currency moves on what changes in the outlook, and a hike that sounds like the last one lowers the expected path of rates.