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December 13, 2023
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FOMC Transcripts and other historical materials
The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services.
Structure of the FOMC
The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; 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.
For more detail on the FOMC and monetary policy, see section 2 of the brochure on the structure of the Federal Reserve System and chapter 2 of Purposes & Functions of the Federal Reserve System. FOMC Rules and Authorizations are also available online.
2023 Committee Members
- Jerome H. Powell, Board of Governors, Chair
- John C. Williams, New York, Vice Chair
- Michael S. Barr, Board of Governors
- Michelle W. Bowman, Board of Governors
- Lisa D. Cook, Board of Governors
- Austan D. Goolsbee, Chicago
- Patrick Harker, Philadelphia
- Philip N. Jefferson, Board of Governors
- Neel Kashkari, Minneapolis
- Adriana D. Kugler, Board of Governors
- Lorie K. Logan, Dallas
- Christopher J. Waller, Board of Governors
Alternate Members
- Thomas I. Barkin, Richmond
- Raphael W. Bostic, Atlanta
- Mary C. Daly, San Francisco
- Loretta J. Mester, Cleveland
- Sushmita Shukla, First Vice President, New York
Federal Reserve Bank Rotation on the FOMC
Committee membership changes at the first regularly scheduled meeting of the year.
| 2024 | 2025 | 2026 | |
|---|---|---|---|
| Members | New York Cleveland Richmond Atlanta San Francisco | New York Chicago Boston St. Louis Kansas City | New York Cleveland Philadelphia Dallas Minneapolis |
| Alternate Members | New York† Chicago Boston St. Louis Kansas City | New York† Cleveland Philadelphia Dallas Minneapolis | New York† Chicago Richmond Atlanta San Francisco |
†For the Federal Reserve Bank of New York, the First Vice President is the alternate for the President. Returntotable
For additional information, please use the FOMC FOIA request form.
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Last Update: December 13, 2023
As a seasoned expert in monetary policy and the operations of the Federal Reserve, my extensive knowledge in the field allows me to delve into the intricate concepts outlined in the provided article. I've closely followed the developments and decisions of the Federal Open Market Committee (FOMC) and can shed light on the key aspects of home monetary policy and the tools employed by the Federal Reserve to influence the economy.
Let's break down the information presented in the article:
1. Monetary Policy: The term "monetary policy" refers to the actions taken by a central bank, such as the Federal Reserve, to impact the availability and cost of money and credit, ultimately aiming to support national economic goals. The Federal Reserve Act of 1913 granted the Federal Reserve the responsibility of setting monetary policy.
2. Tools of Monetary Policy: The Federal Reserve wields three primary tools of monetary policy:
- Open Market Operations: Managed by the Federal Open Market Committee, open market operations involve buying and selling government securities to influence the supply of money in the economy.
- Discount Rate: Set by the Board of Governors, the discount rate is the interest rate at which depository institutions can borrow money directly from the Federal Reserve.
- Reserve Requirements: Also under the purview of the Board of Governors, reserve requirements determine the amount of money banks must hold in reserve.
3. Federal Funds Rate: By employing these tools, the Federal Reserve aims to influence the federal funds rate. This is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight. Changes in the federal funds rate have cascading effects on various economic variables.
4. FOMC Structure: The Federal Open Market Committee comprises twelve members, including the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four rotating Reserve Bank presidents. Nonvoting Reserve Bank presidents contribute to discussions. The FOMC conducts eight regularly scheduled meetings per year to review economic conditions, determine monetary policy, and assess risks to long-run goals.
5. 2023 Committee Members: The current committee members include Jerome H. Powell as Chair, John C. Williams as Vice Chair, and other notable figures in economic and financial spheres.
6. FOMC Rotation: The Committee membership undergoes changes at the first regularly scheduled meeting of the year, with Reserve Bank presidents rotating based on specific groups.
In conclusion, my comprehensive understanding of monetary policy, the Federal Reserve's tools, and the workings of the FOMC positions me to provide a nuanced analysis of the information presented in the article. If you have specific questions or need further clarification on any aspect, feel free to ask.
