Meet the FOMC: Federal Open Market Committee

Because of the media attention to the Jackson Hole meeting being held this weekend August 29, 2015, you are probably hearing quite a bit from the Federal Reserve’s district presidents and their opinions regarding raising  the Fed Funds Rate.

Guess it’s about time to meet the Federal Open Market Committee (FOMC). The FOMC is a committee of members of the U.S. Federal Reserve Bank (the Fed). The Fed has twelve (12) district banks located in each of twelve (12) Fed districts across the United States. Four (4) Federal Banks district presidents are members of the FOMC at any one time. These are considered the “voting” members of the district banks. The other eight (8) district presidents of the Federal Reserve Banks are then considered “non-voting” members. There is an annual rotation of the four (4) Fed district presidents who sit on the FOMC Committee for one year.

As you listen to the opinions of the district Fed presidents, you should hear if that particular district president is a “voting” or “non-voting” member of the FOMC at the present time. A non-voting member of the FOMC committee will not be eligible to vote whether to raise the Fed Funds Rate at the September, 2015 meeting or subsequent meetings this year. The key point to keep in mind when listening to or reading an opinion of a Fed district president is whether he/she is a “voting” member at the time.

The Federal Open Market Committee (FOMC) consists of twelve members–the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee’s assessment of the economy and policy options.

Source: Federal Reserve Bank

The FOMC holds eight (8) regularly scheduled meetings every year. The entire membership of the Committee is as follows:

2015 Members of the FOMC

Information source: Board of Governors of the Federal Reserve System

Author Addendum October 2, 2015:  Here is a little information from the Federal Reserve Bank of Philadelpia on the FOMC:  A Day in the life of the FOMC

Other postings of interest:

Got your ticket to Jackson Hole?

Inflation, deflation, who ya gonna call?

When will the Federal Reserve Bank finally raise interest rates? Why should it matter?

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