What Is the Federal Reserve Board of Governors?

What Is the Federal Reserve Board of Governors?

The Governing Body That Guides the U.S. Central Bank

By Kimberly Amadeo Updated February 08, 2022  Reviewed By Charles Potters

The Federal Reserve Board of Governors is the governing body that guides the U.S. central bank. The Board consists of seven members—nominated by the president and confirmed by the Senate—who each serve 14-year terms, all of which are staggered. A new member is appointed every two years.1

In addition to the Board, the Federal Reserve System has two other components. The 12 regional Federal Reserve Banks provide services to the nation's commercial banking sector, whereas the Federal Open Market Committee (FOMC) conducts monetary policy. Its goal is to promote maximum employment, stable prices, and moderate interest rates over time. All governors sit on the FOMC, along with four of the 12 regional bank presidents.23

NOTE:  President Joe Biden campaigned on the promise to expand the Fed's purpose to include closing racial and economic gaps, which would require an amendment to the Federal Reserve Act by Congress. Biden wants the Fed to require faster check clearing, and to achieve greater diversity in its hiring practices.4

The Fed is located at 20th Street and Constitution Avenue NW, Washington, D.C. 20551. The Fed has nearly 3,000 employees who support the Board.5

Fed Board Independence

The Board structure was created to ensure its independence from politics. The president nominates potential Governors, and the U.S. Senate confirms them. If the staggered schedule is followed, then no president or congressional party majority can control the Board.

The Fed's independence allows it to focus on long-term economic goals, prioritizing fair representation of all areas of the country. Once appointed, Governors may not be removed for their policy views, and, as a result, they can't be pressured to either raise or lower interest rates. This allows them to make all decisions based solely on economic indicators.6

Who Is on the Federal Reserve Board of Governors?

There are seven governors led by a chair and vice chair, who each serve for four-year terms. Both the chair and vice chair may be reappointed to additional four-year terms in the future.7

Chair

The Fed Chair is Jerome Powell. He is already a Governor, serving from May 25, 2012, to Jan. 31, 2028. Prior to joining the Fed, he had been a visiting scholar at the Bipartisan Policy Center, a partner at The Carlyle Group from 1997 to 2005, and a U.S. Treasury official under President George H.W. Bush.8

Powell replaced Janet Yellen, who enacted several successful policies that Powell is continuing. Powell is also following in Yellen's footsteps by gradually raising interest rates.

Chairman Powell also chairs the FOMC, where he frequently meets with the president, the secretary of the Treasury, and Congress. The chair is a member of the International Monetary Fund and the Bank for International Settlements. The person in this position is also the finance minister of the G-7 and G-20.

Vice Chair

The position of vice chair is vacant. Richard H. Clarida was vice chair until he resigned effective Jan. 14, 2022.9 His term began Sept. 17, 2018, and was expected to run until Jan. 31, 2022. Clarida led the Fed’s 2020 review of its long-term objectives and monetary policy strategy. He previously served as assistant secretary for economic policy of the U.S. Treasury in the George W. Bush administration and was also a managing director of PIMCO and a professor at Columbia University.10

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