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. 


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. 

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 President Trump inherited a rare opportunity to stack the board in his favor. The Board Chair position was up for reappointment during his term. Also, three board positions were vacant, including the Vice-Chair position. Two of them have been vacant since the financial crisis

Trump selected Jerome Powell to be the Fed chair. Powell was already a Fed board member, serving from May 25, 2012 to January 31, 2028. He 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. 

Trump appointed him even though he is not in favor of deregulation, one of Trump's priorities. The Senate approved his nomination on January 23, 2018. Powell replaces Janet Yellen. He would continue Yellen's successful policies. Yellen didn'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.

The Chair of the board is also the Chair of the FOMC. The Fed 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.

Trump is nominating Richard Clarida to serve as Vice-Chairman of the board. He was assistant secretary for economic policy at the U.S. Treasury from 2002-2003. He was a professor of economics at Columbia University.

He is nominating Michelle Bowman to fill a vacant board spot. She has the community banking experience Trump was looking for. She was the Kansas bank commissioner. Trump needed someone willing to divest their holdings in all banks. Congress made that a requirement two years ago. 

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

Trump successfully appointed one Board member, Randy Quarles. His board term is October 13, 2017 - January 31, 2032. He 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. Quarles is also the Vice Chairman for Supervision until October 13, 2021. That position was created by the Dodd-Frank Wall Street Reform Act.


Trump's appointees join Lael Brainard. Her term is June 16, 2014 - January 31, 2026. She is the only Ph.D. economist on the Board.. 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.

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.)