Federal Reserve Board: What Does It Do and Who Are Its Members?

Who Really Controls the Fed?

Federal Reserve Board of Governors
Federal Reserve Board Chairman Ben Bernanke (R) walks in with Former Federal Reserve Chairmans Alan Greenspan, former Federal Reserve Board Chairman Paul Volker (C) and Vice Chairman Janet Yellen during the Federal Reserve centennial commemoration at the Federal Reserve building, on December 16, 2013 in Washington, DC. The Federal Reserve marked its one hundred anniversary with commemoration ceremony with former and current chairmans. Photo by Mark Wilson/Getty Images

Definition: The Federal Reserve Board of Governors is the government agency that guides the Federal Reserve System. The Board consists of seven members who each serve fourteen-year terms. The President appoints them, and the U.S. Senate confirms the appointments. Two positions have remained vacant since the financial crisis, while a third became vacant in April 2017.

The Board is the governing body of the U.S. central bank.

The Fed is responsible for monetary policy that controls the money supply and interest rates. Its dual mandate is to control inflation and reduce unemployment. The other two bodies are 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 Board is supported by 1,800 employees. Its address is 20th Street and Constitution Avenue N.W., Washington, D.C. 20551. (Source: "How Is the Federal Reserve System Structured?" Federal Reserve.)

What Does the Federal Reserve Board Do?

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, the Board manages the U.S. payments system. The banks it supervises clear checks, process electronic payments, and distribute cash. (Source: "What Is the Purpose of the Federal Reserve System?" Board of Governors of the Federal Reserve.)


Board members serve staggered terms. That means a new one is appointed every two years. That keeps the Board independent of politics. No President or Congress can control a majority of the board.

(Source: "Introduction to the Board of Governors," Federal Reserve Bank of St. Louis.)

The Chair is Janet Yellen (February 3, 2014 - February 3, 2018). She was Vice Chair of the Board (October 4, 2010- February 3, 2014). She was President of Reserve Bank of San Francisco (2004-2010) and professor of economics since 1980. She is more concerned about unemployment than inflation. That makes her favor expansionary policy and keeping rates low. That's called "dovish." Board members that are hawkish prefer contractionary policy. They would rather raise rates because they are more worried about inflation. 

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 is Stanley Fischer (May 28, 2014 - January 31, 2018). He was governor of Israel's central bank (2005 - 2013), vice-chairman of Citigroup (2002 - 2005). Fischer was also deputy managing director of the International Monetary Fund (1994 - 2001), Chief Economist of the World Bank (1988 - 1990), and professor of economics at MIT (1977 - 1999). He is equally concerned about unemployment and inflation, which makes him a moderate. 

Since April 2017, there have only been two other board members:

  • 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) 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.

The third had been Daniel Tarullo, a law professor at Georgetown University. He held several senior economic positions for President Clinton (1993 - 1998). He is dovish. He was supposed to serve until January 31, 2022, but resigned as of April 5, 2017.

President Trump has yet to appoint his successor. He is looking for at least one candidate with community banking experience. But he hasn't found anyone who is willing to divest their holdings in all banks. Congress made that a requirement two years ago. That's holding the Trump administration from filling all three vacant board positions. (Source: "Trump Administration Struggles to Find Community Banker for Fed Board," The Wall Street Journal, June 27, 2017.) 


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