Thursday, February 8, 2018

Fed Structure

The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System who are appointed by the President to staggered 14 year terms; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.

The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.  The Fed members are not required to serve all 14 years and some retire or resign early as we have seen lately. Jerome Powell is scheduled to take over as chair for Janet Yellen Monday when her term as chair expires. Her term as a governor doesn't expire until 2024 and she could stay but indicated she will retire.

The makeup of the Fed is important because it is the most powerful financial institution in the world and is a huge factor in mortgage interest rates. New additions are expected this year but nominations go through the Senate and there is often significant debate.


Please give us a call if you have any financial questions or if you need a second opinion on a loan scenario. If you are calling after hours or on weekends, please use any of the direct contact numbers for me and our Loan Officer Assistants listed below or go to for more information.

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