Federal Reserve Structure
The Federal Reserve consists of the Board of Governors, the Federal Reserve Banks, and the Federal Open Market Committee, or FOMC. The Board of Governors is the governing body of the Federal Reserve and it is run by seven “governors” who are nominated by the U.S. president and confirmed by the Senate.The board oversees the 12 U.S. Reserve Banks, each of which has its own bank president. The FOMC is the body of the Federal Reserve that sets monetary policy, including Fed funds, target interest rates, and quantitative easing or tightening policies. The FOMC consists of 12 voting members: all seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining 11 Reserve Bank presidents, who serve one-year terms on the FOMC on a rotating basis.
The 2022 FOMC consists of the following voting members:
Board of Governors:
Jerome H. Powell, FOMC Chairman Michelle W. Bowman Lael Brainard Christopher J. Waller
There are currently three vacant Board of Governor positions.
Voting Reserve Bank presidents:
Doves Versus Hawks
The FOMC must regularly come to a consensus on monetary policy, but that doesn’t mean all votes are unanimous and all Fed members have the same take on the economy. In addition, all the members of the Federal Reserve give speeches, make appearances, grant interviews, and appear on panels and at events on a regular basis.There’s certainly a pecking order when it comes to which Fed members’ comments are most likely to move the market.
At the top of the list, investors should monitor Fed Chair Jerome Powell and Vice Chair Lael Brainard. Powell and Brainard both have a reputation for being overly dovish, which is generally good for investors. When these typically dovish Fed members make hawkish comments, investors know the Fed is likely getting serious about tightening.
