FOMC: What It Is, Who Is on It, and What It Does

FOMC: What It Is, Who Is on It, and What It Does

Twelve strangers who change your life eight times a year

U.S. Federal Reserve Chairman Jerome Powell speaks during a news conference March 21, 2018 in Washington, DC

By Kimberly Amadeo Updated February 12, 2022  Reviewed By Robert C. Kelly

The Federal Open Market Committee (FOMC) conducts monetary policy for the U.S. central bank. As an arm of the Federal Reserve System, its goal is to promote maximum employment and to provide you with stable prices and moderate interest rates over time.

The FOMC uses monetary policy to influence the availability of money and credit. It announces its decisions at a committee meeting eight times a year, explaining its actions by commenting on how well the economy is performing, especially inflation and unemployment.

Key Takeaways

The Federal Reserve Act of 1913 gave the Federal Reserve and the FOMC responsibility for setting monetary policy.

Three Congressional appointees sit on the FOMC, and there are three vacancies as of 2022.

The FOMC uses its tools to attain maximum employment and stable prices. It must manage unemployment and inflation to achieve that.

Who Is on the FOMC?

The FOMC is made up of 12 voting members. They include the chair and six other governors appointed by Congress. It also includes the vice chair and four other regional Federal Reserve Bank presidents. The vice chair position is permanent, while the regional presidents serve one-year terms on the FOMC on a rotating basis.1

Chair

Jerome H. Powell became the chairman of the FOMC and the Federal Reserve Board of Governors on Feb. 5, 2018, for a four-year term lasting through Jan. 31, 2028. ​He has been a Fed board member since May 25, 2012.

Powell was a former senior Treasury official under former President George H.W. Bush prior to joining the Fed. He was a visiting scholar at the Bipartisan Policy Center, and a partner at the Carlyle Group from 1997 to 2005. He replaced Janet Yellen as the Fed chair.2

Vice Chair

The vice chairmanship always goes to the president of the Federal Reserve Bank of New York. Former San Francisco Fed President John Williams has held the title since June 2018.3

Congressional Appointees

Richard H. Clarida (term: Sept. 17, 2018, to Jan. 31, 2022) resigned his governor seat effective Jan. 14, 2022.4 Dr. Clarida was an economics professor at Columbia University and director at PIMCO. Dr. Clarida also served as the assistant secretary of the U.S. Department of the Treasury for Economic Policy from February 2002 until May 2003.5

Randal Quarles (term: Oct. 13, 2017, to Jan. 31, 2032) resigned his seat at the end of December 2021.6 Quarles was the Vice Chair for Supervision until Oct. 13, 2021. He was also the chair of the Financial Stability Board. Both positions were created by the Dodd-Frank Wall Street Reform Act to strengthen financial stability after the 2008 financial crisis.7

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https://www.thebalance.com/federal-open-market-committee-fomc-3305987