The Federal Open Market Committee which is commonly known as the FOMC is responsible for dictating monetary policy such as buying and selling of US Treasury Bonds by the Federal Reserve. The FOMC is made up of twelve voting and seven non-voting members. Seven of the voting members come from the Federal Reserve Board of Governors. The other five members are Federal Reserve Bank presidents. The New York Federal Reserve Bank president is a permanent member of the FOMC while the other four voting positions are rotated among the eleven other Federal Reserve Bank presidents. Currently the presidents of the Boston, Chicago, Kansas City, and St. Louis banks are voting members.
The FOMC is required to meet four times a year, but for decades has met eight times a year. The goal of the Federal Reserve with respect to monetary policy is to keep inflation under control while simultaneously maintaining high levels of employment. This is definitely a balancing act as rapid economic growth can result in full employment, but also result in inflationary pressure.
The FOMC statement will have an impact on stocks, bonds, and the currency markets. For stocks higher interest rates can hurt the profitability of businesses which in turn may put pressure on stock prices. Conversely, lower interest rates are good for growth and stock prices. The bond market is a little trickier. The bond market is very focused on any hint of inflation. Higher inflation will have a negative impact on bond values as interest rates may move up (and bond prices down) in an effort to combat inflation or slow economic growth. Finally the dollar will be more attractive to foreign investors if interest rates are expected to increase. The dollar would be expected to strengthen with higher rates and drop if lower rates are on the horizon.