The Federal Open Market Committee (FOMC) is the group of the Federal Reserve that is responsible for open market operations. The FOMC sets interest rates either directly (by changing the discount rate) or through the use of open market operations (by buying and selling government securities that affect the federal funds rate). The FOMC is headed by the chairman of the Federal Reserve Board. This is currently Jerome Powell.
Formation and History
The FOMC was formed by the Banking Act of 1933 and did not include voting rights for the Board of Governors. The Banking Act of 1935 revised these protocols to include the Board of Governors and to closely resemble the present-day FOMC. The Banking Act was amended in 1942 to create the current structure of 12 voting members.
The FOMC is composed of the seven members of the Board of Governors, including the chairman, and five Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves on a continuous basis. The presidents of the other Reserve Banks serve on a rotating basis for one-year terms beginning on Jan. 1 of each year.
Rotation is conducted so that each year one member is elected to the Committee by the Boards of Directors of each of the following groups of Reserve Banks: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco.
Current Committee Members
As of 2018, members of the FOMC are:
- Jerome H. Powell, Board of Governors, Chairman
- John C. Williams, New York, Vice Chairman
- Thomas I. Barkin, Richmond
- Raphael W. Bostic, Atlanta
- Michelle W. Bowman, Board of Governors
- Lael Brainard, Board of Governors
- Richard H. Clarida, Board of Governors
- Mary C. Daly, San Francisco
- Loretta J. Mester, Cleveland
- Randal K. Quarles, Board of Governors
Alternate members are: