Who Is on the Federal Reserve Board?
Above, a still from the July 2021 FRONTLINE documentary "The Power of the Fed." Although the chair typically serves as the face of the Fed, the U.S. central bank's Board of Governors is composed of seven members with equal votes.
Feb. 22, 2022, update: There are currently four members of the U.S. Federal Reserve Board of Governors: Jerome Powell, Lael Brainard, Michelle Bowman and Christopher J. Waller. President Joe Biden announced last November that he planned to nominate Powell, whose term as Fed chair officially ended this month, to another four-year term as chair, and to nominate Brainard as vice chair. Biden also announced three new nominees to the Fed board — Sarah Bloom Raskin, for vice chair of supervision, and Lisa Cook and Philip Jefferson as governors — following the resignations of Randal Quarles in November and Richard Clarida in January. None of those five positions has yet been confirmed. Read more about recent ethics changes at the Fed.
Jerome Powell, Janet Yellen, Ben Bernanke, Alan Greenspan: The chair of the Federal Reserve Board of Governors is the default face of the Fed — the one name the public typically knows. But the board is actually composed of seven members, all with equal votes.
What does the Fed board do? And where do its members come from? With the new FRONTLINE documentary The Power of the Fed looking at the U.S. central bank’s efforts to avert economic crisis when COVID-19 struck, here’s a companion primer on how the board is structured and who wields its power.
What is the Federal Reserve Board of Governors?
The Federal Reserve is the central bank of the United States. Its job is to promote employment and to keep inflation in check, primarily by raising and lowering short-term interest rates. The Federal Reserve System has three main entities: the Board of Governors, the Federal Open Market Committee (FOMC) and 12 member banks — with each of the latter representing a district of the U.S.
The Board of Governors supervises those 12 districts, deciding, for example, if two commercial banks can merge; if a bank can open up a new line of business; and how much money commercial banks should keep in their reserves to maintain a healthy economy.
All members of the board, or “governors,” also have a permanent seat on the FOMC, the body that sets U.S. monetary policy: raising or lowering interest rates, and deciding when to buy bonds from commercial banks, companies or other financial institutions.
In addition to the seven-member Board of Governors, the FOMC has five other voting seats, filled by presidents of the Federal Reserve Banks. When the FOMC meets, all seven governors and 12 district presidents convene, but only the seven governors and five of the 12 Federal Reserve Bank presidents have the right to vote. The president of the New York bank always votes; the others rotate.
How does someone make it onto the board?
Each of the board’s seven governors is appointed by the sitting U.S. president and confirmed by the Senate — either to a full 14-year term or to fill the remainder of an unexpired term. (By contrast, the 12 Federal Reserve regional bank presidents are chosen by search committee.) Board members have included economists, lawyers, scholars, private equity managers, and longtime public servants in the Fed or the Treasury.
Of the 109 governors appointed since the first board was officially sworn in, in August 1914, three have been African American and ten have been women.
It’s not unusual that a Fed governor who served as chair under one administration is reappointed as chair by another; take Ben Bernanke, who was appointed by George W. Bush but became better known during the Obama years for the Fed’s economic stimulus in the wake of the 2008 financial crisis.
It’s hard to know when or if a potential governor turns down a nomination, but some appointees have been rejected by the Senate. One of the most famous cases is Peter Diamond, a Nobel Prize winner, professor at MIT and Obama appointee. The Republican-controlled Senate rejected Diamond in 2010, citing his background in labor economics instead of monetary policy. A majority-Republican Senate also rejected Trump appointees — most famously in 2020 Judy Shelton, a former Trump advisor who advocated for the return of the gold standard.
Does the chair have more power than the other governors?
That depends on whether you mean power or influence. On the position of chair, David Wessel, head of the Brookings Institute’s Hutchins Center on Fiscal and Monetary Policy, said, “His legal power is somewhat limited, but his actual power, in fact, is very strong, because what the chairman says usually prevails.” (Read more about Jerome Powell, the current chair.)
The board also has a vice chair and, most recently, a vice chair of supervision — an informal position that became official after Congress passed the Dodd-Frank Act, regulating banks following the 2008 credit crisis.
Board members can’t be fired over their policy opinions, only by “cause,” a legal term for breaking the law. They can be pressured publicly by members of Congress or by presidents, as when President Donald Trump complained about Powell increasing interest rates in December 2018.
Congress “can send signals, threatening to pass legislation … or making it known that Congress is unhappy about a particular decision. It’s an informal pressure, and there’s no guarantee the Fed will respond, but Congress does have the capacity to try to influence them,” said Sarah Binder, a professor of political science at George Washington University and co-author of The Myth of Independence: How Congress Governs the Federal Reserve.
Congress created the Fed in 1913 with the Federal Reserve Act and could potentially disband it, but doing so would take a lot of effort. Binder said Congress could pass laws effectively directing the Fed into action — setting a target employment rate, for example — but these would have to be signed by the U.S. president.
Do most governors stay for the entire 14-year term?
Terms were mandated to last up to 14 years to provide political independence, but governors usually stay less time — on average, about seven years. The longest-tenured governor was economist Menc S. Szymczak, who served from 1933 to 1961 and was reappointed twice.
If all governors finished out their terms, the current board would contain members nominated by President George W. Bush. But the longest-sitting governor currently on the board is Powell, appointed by President Barack Obama in May 2012. The only other Obama appointee is Lael Brainard, who joined the board in June 2014.
Those who come from academia often take leave from their teaching or research jobs to join the board for a few years. Others leave the board to go into the private sector.
“It turns out that, if you spend a couple of years on the Federal Reserve board, you can make a lot of money in the private sector when you leave,” Wessel said. “Some people leave to make money. That’s the temptation.” Congress last adjusted the board’s salaries in 2019, setting the chair’s annual pay at $203,500 and $183,100 for the other governors.
Many governors join the board by finishing out the term of someone who left early; in this case, governors can be reappointed to another term. The last time a governor stayed a full term was Alan Greenspan, whose term expired in 2006. He was the only chair reappointed by four different presidents: Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush.
For the positions of chair and vice chair, terms are four years. Chairs are often reappointed by an incoming president, but President Trump broke this informal tradition by not reappointing Obama’s pick, Janet Yellen, instead nominating the current chair, Powell.
Unless he chooses to leave early, Powell’s term as chair will end in 2022. President Biden’s first nomination to the Board of Governors will come this year, for the vice chair of supervision — a role experts imagine he will fill with someone tough on banks.
Who are the current governors?
Jerome Powell, board chair, age 68
Took office: 2012, appointed by President Obama; became chair in 2018, appointed by President Trump
Term ends: 2022, as chair; 2028, as governor
Read more about the current chair, who earned his law degree from Georgetown University and did not have a background as an economist.
Richard Clarida, vice chair, age 64
Took office: 2018, appointed by President Trump
Term ends: 2022, as vice chair and governor
Clarida was a professor of economics and international affairs at Columbia University for 30 years. He also worked as a top official in the U.S. Treasury under the George W. Bush administration and at the investment firm PIMCO.
Randal Quarles, vice chair for supervision, age 63
Took office: 2017, appointed by President Trump
Term ends: October 2021, as vice chair; 2032, as governor
A top Treasury official during the George W. Bush administration, Quarles founded the investment firm Cynosure Group with members of the Eccles family. Quarles is married to a relative of Marriner Eccles, the Fed chair from 1936 to 1948 for whom he Federal Reserve building in Washington, D.C., is named.
Update: Quarles submitted his resignation to the board on Nov. 8, 2021.
Michelle Bowman, governor, age 50
Took office: 2018, appointed by President Trump
Term ends: 2034
Before serving as the state bank commissioner of Kansas and the vice president of a Kansas bank, Bowman held various positions in the federal government, including director of congressional and intergovernmental affairs at the Federal Emergency Management Agency. She is a member of the New York Bar Association.
Lael Brainard, governor, age 59
Took office: 2014, appointed by President Obama
Term ends: 2026
Brainard was a top Treasury official under the Obama administration. She has worked as an associate professor of applied economics at MIT and at the consulting firm McKinsey & Company.
Christopher Waller, governor, age 62
Took office: 2020, appointed by President Trump
Term ends: 2030
Waller served as executive vice president and director of research at the Federal Reserve Bank of St. Louis from 2009 to 2020. Previously, he a chair of economics at the University of Notre Dame.
There’s currently one open seat on the board of governors; Quarles could occupy it when his term as vice chair of supervision ends in October. Of the opening, Binder said, “The chair decisions matter a lot, but given the number of appointments that presidents have to make … the sixth or seventh seat on the board, with all the respect, to fill that spot is just much less important, politically and policy-wise, for the White House.”
This story has been updated to clarify how Federal Reserve regional bank presidents are chosen.