Federal Reserve Board of Governors and Its Members

Who Really Controls the Fed?

Federal Reserve Board of Governors
••• A rare photo of four Federal Reserve Board Chairs: Ben Bernanke (R), Alan Greenspan, Paul Volker (C) and Janet Yellen (L) during the Federal Reserve centennial commemoration at the Federal Reserve building, on December 16, 2013 in Washington, DC. Photo by Mark Wilson/Getty Images

The Federal Reserve Board of Governors is the governing body that guides the U.S. central bank. The board consists of seven members who each serve fourteen-year terms. The president appoints them, and the U.S. Senate confirms the appointments. 

The Federal Reserve System is responsible for monetary policy that controls the money supply and interest rates. Its dual mandate is to control inflation and reduce unemployment.

In addition to the board, the Fed consists of the 12 regional Federal Reserve Banks and the Federal Open Market Committee. The Fed banks provide services to the nation's commercial banking sector. The FOMC sets monetary policy.

The Fed has 1,800 employees that support the board. Its address is 20th Street and Constitution Avenue N.W., Washington, D.C. 20551. 


Board members serve staggered terms. That means a new one is appointed every two years. That keeps the board independent of politics. If that schedule is followed, then no president or Congressional party majority can control the board.

But three board positions are vacant, including the Vice-Chair position. Two positions have remained vacant since the financial crisis. As a result, President Trump has inherited a rare opportunity to stack the board in his favor. He's already nominated one member, Randy Quarles. So another three would give him four out of seven members, including the Chair and Vice Chair positions.

How this will play out is unclear. Trump prefers low interest rates and deregulation. In the past, he even signaled a return to the gold standard

The media considers board members "dovish" or "hawkish." Dovish members are more concerned about lowering unemployment than reducing inflation. They favor expansionary monetary policy and low interest rates.

Board members that are hawkish prefer contractionary policy. They would rather raise rates because they are more worried about inflation. 

There are currently four board members:

  • Janet Yellen (October 2010 - January 31, 2024) won't serve out the remainder of her regular board term. The only Fed chair to do so was Marriner Eccles (1934 - 1948) who stayed on the board for three years after his chairmanship ended.
  • Jerome Powell (May 25, 2012 - January 31, 2028) was a visiting scholar at the Bipartisan Policy Center, a partner at the Carlyle Group (1997 - 2005), and a Treasury official under President George H.W. Bush. He is dovish. 
  • Lael Brainard (June 16, 2014 - January 31, 2026) will be the only Ph.D. economist on the Board after Yellen leaves. She was a senior Treasury official (2010 - 2013), a senior member of the Brookings Institution (2001- 2008), and Deputy National Economic Advisor to President Clinton. She was a professor of economics at the MIT Sloan School of Management (1990 - 1996). She is dovish.
  • Randy Quarles (October 13, 2017 - January 31, 2032) supports bank deregulation. He was a managing director at Cynosure Group and the Carlyle Group, and a Treasury official under President George W. Bush. Neither dovish nor hawkish, he favors using strict guidelines that determine when the Fed changes rates. He was President Trump's first appointee. He is also the Vice Chairman for Supervision until October 13, 2021. That position was created by the Dodd-Frank Wall Street Reform Act. ​

    The board's Chair is Jerome PowellPresident Trump nominated Powell, a current board member, to replace Yellen as the Fed Chair. Powell would continue Yellen's successful policies, and is not opposed by Congress. That outweighs the fact that he's not in favor of deregulation, one of Trump's priorities. The Senate approved his nomination on January 23, 2018.

    Trump considered three other appointees for the Chair position.

    • He considered reappointing Yellen, since she has overseen a strong economic rebound. But many Republicans in Congress called for her ouster because she supports bank regulation. She is normalizing interest rates, which Trumps prefers to keep low.
    • Trump was impressed with Stanford economist John Taylor. But he is the author of the Taylor Rule, which automatically raises rates as unemployment falls and inflation rises. The Rule suggests a Fed funds rate of 3 percent, double its current rate. 
    • Some analysts believed Trump would appoint former board member Kevin Warsh. He agrees with Trump's emphasis on bank deregulation. But he is hawkish, and Trump is not.

    The Chair of the board is also the Chair of the FOMC. The Chair meets with the President, the Secretary of the Treasury and Congress. The Chair is a member of the International Monetary Fund, the Bank for International Settlements, and the G-7 and G-20 as finance minister.

    The Vice Chairman position is vacant. Stanley Fischer held it between May 28, 2014 and October 16, 2017. He was supposed to serve until January 31, 2018, but resigned early. Trump is considering Mohamed El-Erian, former CEO of financial firm Pimco. He was also a deputy director of the International Monetary Fund. Trump is also considering Richard Clarida who was assistant secretary for economic policy at the U.S. Treasury from 2002-2003. Another candidate is Lawrence Lindsey, who was a Fed board member from 1991-1997.

    Trump nominated Marvin Goodfriend for a vacant Board spot. He is a Carnegie Mellon professor and former Fed economist.

    Trump is looking for at least one candidate with community banking experience. He is considering Michelle Bowman, a Kansas banking regulator. Trump must find someone who is willing to divest their holdings in all banks. Congress made that a requirement two years ago. 

    What the Board Does

    The board has four primary functions. First, it guides monetary policy. All board members sit on the FOMC. The board has the majority of seats on the FOMC, so it effectively controls all decisions. It does listen to the input from the other members since they are presidents of the member banks. The FOMC meets eight times a year to set the target for the fed funds rate and to implement open market operations.  The board alone sets the discount rate and the reserve requirement for member banks. Find out more about the Federal Reserve's tools.

    Second, it analyzes economic developments. It releases the Beige Book monthly. It provides the monetary policy report twice a year (around February 20 and July 20). It reports its findings on the state of the economy to Congress. Specifically, the Chair presents separately to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services.

    Third, the board issues regulations for the general banking industry, and for Federal Reserve member banks. It enforces those rules for the Federal Reserve member banks only. These include 900 state banks, that are members of the Federal Reserve System, and 5,000 bank holding companies. The Office of the Comptroller of the Currency supervises national banks. The Federal Deposit Insurance Corporation supervises state banks that aren't Federal Reserve members. This fragmentation allows banks to choose their supervisor by determining what kind of bank they want to be. That's one of the complexities that created the financial crisis. 

    Fourth, it manages the U.S. payments system. The banks it supervises clear checks, process electronic payments and distribute cash. 


    The board meets twice a month. It addresses all regulatory and monetary policy. You may attend any open session. Find out more at the board's meeting website.  (Sources: "How Is the Federal Reserve System Structured?" Federal Reserve."Introduction to the Board of Governors," Federal Reserve Bank of St. Louis. "What Is the Purpose of the Federal Reserve System?" Board of Governors of the Federal Reserve.)