<p>The Federal Open Market Committee (FOMC) is a policy-making body within the Federal Reserve System, responsible for influencing the nation's economy by determining monetary policy. It does this primarily by buying or selling government securities, which affects the supply of money and credit in the economy.</p>

<h2>How It Works</h2>
<p>The FOMC consists of 12 members: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four other Reserve Bank presidents who serve on a rotating basis. The Committee meets eight times a year to assess economic conditions and decide on policy changes. These changes can include adjusting the federal funds rate, which is the interest rate at which banks lend reserve balances to other banks on an overnight basis.</p>
<p>The FOMC uses various tools to influence the economy. Open market operations, as the name suggests, involve buying or selling government securities. This changes the amount of money in the economy, influencing interest rates and economic activity. The FOMC also sets the discount rate, which is the interest rate that the Federal Reserve charges banks for short-term loans. Additionally, the Committee can use forward guidance, communicating its expectations for the future path of the economy and monetary policy to influence long-term interest rates.</p>

<h2>Why It Matters</h2>
<p>The FOMC's decisions have significant impacts on the economy. By influencing interest rates, the Committee can encourage or discourage borrowing and spending, which can stimulate or slow down economic growth. This can affect employment, inflation, and other key economic indicators. For example, during the 2008 financial crisis, the FOMC lowered the federal funds rate to near zero to encourage borrowing and spending, helping to stabilize the economy and prevent a deeper recession.</p>