How Does FOMC Affect Stocks & ETFs?

The Federal Open Market Committee (FOMC) sets the federal funds rate — the benchmark interest rate that influences borrowing costs across the entire economy. The decision comes with a policy statement and, quarterly, updated economic projections (the 'dot plot').

Interest rates are the single most powerful lever in financial markets. Higher rates increase discount rates on future cash flows, raising borrowing costs for companies and consumers. Lower rates do the opposite. Every asset class reprices around FOMC decisions.