The Federal Open Market Committee (FOMC) is part of the U.S. Federal Reserve (Fed).
Its vital role is to determine the monetary policy of the United States, mainly through setting the federal funds rate, which is the interest rate at which depository institutions lend funds maintained at the Federal Reserve to each other overnight.
Changes in the federal funds rate influence other global interest rates (including Canada's), such as those for mortgages and savings. These rates, in turn, impact the North American economy by:
(A) encouraging borrowing and spending (with lower rates), or
(B) discouraging borrowing and spending (with higher rates).
Fed policy is highly correlated with Bank of Canada policy due to the close economic relationship between our countries.