The Federal Open Market Committee (FOMC) is the chief architect of the nation's monetary policy. The twelve voting members of the committee are made up of the Fed chairman, the Board of Governors, the Federal Reserve Bank of New York's president, and four other district bank presidents who serve on a rotating basis, although all the district bank presidents are present at the committee meeting. The FOMC meets eight times a year, or about once every six weeks to review economic performance and decide the course of monetary policy by targeting the fed funds rate. FOMC meetings are closely monitored by the press and financial markets. Members of the media and investors carefully analyze the FOMC's press releases, looking for clues as to what might be the future direction of policy.
The structure of the FOMC makes it an effective decision-making body. The presence of the Board of Governors ensures that the needs of the country as a whole are being met, while the presence of the bank presidents ensures that regional concerns are considered. The governors are also representative of the public sector, while the presidents are representative of the private sector. Each district prepares a report on the economic conditions in the district, called a Beige Book report. In coming to a decision on monetary policy, many voices are heard and the perspectives of the different constituencies are represented.
Investors attempting to profit by speculating on the Fed's interest rate policies would study the size of Alan Greenspan's briefcase during his tenure as Fed chairman. They theorized that if the briefcase was big and heavy, he was carrying documentation to support his argument for changing interest rates. If the briefcase was light, then interest rates would probably remain unchanged.