The Federal Reserve System is the central banking system of the United States. It was created on December 23,1913,with the enactment of the Federal Reserve Act,after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. Over the years,events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System.
Price stability is a goal of monetary and fiscal policy aiming to support sustainable rates of economic activity. Policy is set to maintain a very low rate of inflation or deflation. For example,the European Central Bank (ECB) describes price stability as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the Euro area of below 2%. However,by referring to "an increase in the HICP of below 2%" the ECB makes clear that not only persistent inflation above 2% but also deflation are inconsistent with the goal of price stability.
The Federal Open Market Committee (FOMC) is a committee within the Federal Reserve System that is charged under United States law with overseeing the nation's open market operations. This Federal Reserve committee makes key decisions about interest rates and the growth of the United States money supply. Under the terms of the original Federal Reserve Act,each of the Federal Reserve banks was authorized to buy and sell in the open market bonds and short term obligations of the United States Government,bank acceptances,cable transfers,and bills of exchange. Hence,the reserve banks were at times bidding against each other in the open market. In 1922,an informal committee was established to execute purchases and sales. The Banking Act of 1933 formed an official FOMC.
William McChesney Martin Jr. was an American business executive who served as the 9th chairman of the Federal Reserve from 1951 to 1970,making him the longest holder of that position. He was nominated to the post by President Harry S. Truman and reappointed by four of his successors. Martin,who once considered becoming a Presbyterian minister,was described by a Washington journalist as "the happy Puritan".
Thomas Bayard McCabe was an American businessman who served as the 8th chairman of the Federal Reserve from 1948 to 1951. McCabe also served as president and CEO of Scott Paper Company for 39 years.
Marriner Stoddard Eccles was an American economist and banker who served as the 7th chairman of the Federal Reserve from 1934 to 1948. After his term as chairman,Eccles continued to serve as a member of the Federal Reserve Board of Governors until 1951.
The Federal Reserve System has faced various criticisms since it was authorized in 1913. Nobel laureate economist Milton Friedman and his fellow monetarist Anna Schwartz criticized the Fed's response to the Wall Street Crash of 1929 arguing that it greatly exacerbated the Great Depression. More recent prominent critics include former Congressman Ron Paul.
Ben Shalom Bernanke is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Federal Reserve,he was appointed a distinguished fellow at the Brookings Institution. During his tenure as chairman,Bernanke oversaw the Federal Reserve's response to the late-2000s financial crisis,for which he was named the 2009 Time Person of the Year. Before becoming Federal Reserve chairman,Bernanke was a tenured professor at Princeton University and chaired the Department of Economics there from 1996 to September 2002,when he went on public service leave. Bernanke was awarded the 2022 Nobel Memorial Prize in Economic Sciences,jointly with Douglas Diamond and Philip H. Dybvig,"for research on banks and financial crises",more specifically for his analysis of the Great Depression.
The Board of Governors of the Federal Reserve System,commonly known as the Federal Reserve Board,is the main governing body of the Federal Reserve System. It is charged with overseeing the Federal Reserve Banks and with helping implement the monetary policy of the United States. Governors are appointed by the president of the United States and confirmed by the Senate for staggered 14-year terms. It is headquartered in the Eccles Building on Constitution Avenue,N.W. in Washington,D.C.
The Federal Reserve Bank of Richmond is the headquarters of the Fifth District of the Federal Reserve located in Richmond,Virginia. It covers the District of Columbia,Maryland,North Carolina,South Carolina,Virginia,and most of West Virginia excluding the Northern Panhandle. Branch offices are located in Baltimore,Maryland and Charlotte,North Carolina. Thomas I. Barkin became president of the Richmond Fed following the retirement of Jeffrey M. Lacker in April 2017. The previous president,J. Alfred Broaddus,retired in 2004.
The Federal Reserve Bank of Chicago is one of twelve Federal Reserve Banks that,along with the Federal Reserve Board of Governors,make up the Federal Reserve System,the United States' central bank. The Chicago Fed serves the Seventh District,which encompasses the northern portions of Illinois and Indiana,southern Wisconsin,the Lower Peninsula of Michigan,and the state of Iowa. In addition to participation in the formulation of monetary policy,each Reserve Bank supervises member banks and bank holding companies,provides financial services to depository institutions and the U.S. government,and monitors economic conditions in its District.
Jeffrey M. Lacker is an American economist and was president of the Federal Reserve Bank of Richmond until April 4,2017. He is now a Distinguished Professor in the Department of Economics at the Virginia Commonwealth University School of Business in Richmond,Virginia.
The Shadow Open Market Committee (SOMC) is an independent group of economists,first organized in 1973 by Professors Karl Brunner,from the University of Rochester,and Allan Meltzer,from Carnegie Mellon University,to provide a monetarist alternative to the views on monetary policy and its inflation effects then prevailing at the Federal Reserve and within the economics profession.
James Brian Bullard is the former chief executive officer and 12th president of the Federal Reserve Bank of St. Louis,a position he held from 2008 until August 14,2023. In July 2023,he was named dean of the Mitchell E. Daniels Jr. School of Business at Purdue University.
In monetary policy of the United States,the term Fedspeak is what Alan Blinder called "a turgid dialect of English" used by Federal Reserve Board chairs in making wordy,vague,and ambiguous statements. The strategy,which was used most prominently by Alan Greenspan,was used to prevent financial markets from overreacting to the chairman's remarks. The coinage is an intentional parallel to Newspeak.
Thomas MacGillivray Humphrey was an American economist. Until 2005 he was a research advisor and senior economist in the research department of the Federal Reserve Bank of Richmond and editor of the bank's flagship publication,the Economic Quarterly. His publications cover macroeconomics,monetary economics,and the history of economic thought. Mark Blaug called him the "undisputed master" of British classical monetary thought.
Winfield W. Riefler (1897–1974) was an American economist and statistician who helped create the Federal Housing Administration and was instrumental in the 1951 Treasury-Fed Accord
Robert P. Black,a native of Hickman,Kentucky,was the fifth president (1973–1992) of the Federal Reserve Bank of Richmond,the headquarters of the Fifth District of the Federal Reserve System. He was preceded in that position by Aubrey N. Heflin and succeeded by J. Alfred Broaddus (1993–2004) and Jeffrey Lacker.
Marvin Seth Goodfriend was an American economist. He held the Allan H. Meltzer Professorship in economics at Carnegie Mellon University;he was previously the director of research at the Federal Reserve Bank of Richmond. Following his 2017 nomination to the Federal Reserve Board of Governors,the White House decided to forgo renominating Goodfriend at the beginning of the new term.
Christopher J. Waller is an American economist who is a member of the Federal Reserve Board of Governors since 2020. A nominee of then-President Donald Trump,he was confirmed by the Senate in December 2020,to serve through January 2030.
