Federal Reserve meeting schedule proposal

The Federal Reserve is considering a reduction of its regular policy meetings from eight to six per year, according to a report in the New York Times. Chair Warsh proposed the change, which would consist of six meetings focused on interest‑rate decisions and two additional meetings dedicated to substantive economic topics.

Legal framework and current schedule

Federal law requires the central bank to meet at least four times annually. The existing calendar already includes eight regularly scheduled Federal Open Market Committee (FOMC) meetings each year.

Market impact assessment by Bank of America

Bank of America analysts indicated that markets would likely accept a shift to six policy‑focused meetings, but they cautioned that the Fed should announce any changes well in advance to avoid disrupting front‑end market operations. The primary concerns relate to FOMC overnight index swaps (OIS) and fed funds futures.

  • OIS swaps typically see the most activity about six months ahead of a meeting, with the highest concentration of trades in the zero‑to‑three‑month segment.
  • Fed funds futures display substantial open interest over a similar horizon, with the largest open interest in the first through sixth contracts.

A rapid implementation of new meeting dates could temporarily reduce front‑end market functioning. Dealers might become less willing to provide liquidity in 2027 FOMC OIS contracts until the new schedule is confirmed, and fed funds futures activity could see reduced risk‑taking and liquidity due to uncertainty about meeting dates.

Recommendations

Bank of America recommended that the Fed either settle quickly on a new meeting schedule or delay implementation by six months or more to mitigate market disruption.

International context

Most major global central banks maintain eight meetings per year. The Swiss National Bank and Norges Bank meet four times annually. The European Central Bank and the Bank of England shifted to eight meetings per year in 2015 and 2016 respectively, with the ECB providing six months’ notice and the BoE giving 13 months. The Reserve Bank of Australia moved to eight yearly meetings in January 2024 after announcing the change in July 2023.

This article was generated with the support of AI and reviewed by an editor.