At the core of the Federal Reserve System is the Board of Governors, or Federal Reserve Board. The Board of Governors, located in Washington, D.C., is a federal government agency that is the Fed's centralized component. The Board of Governors consists of seven members who are appointed by the president of the United States and confirmed by the Senate. These Governors guide the Federal Reserve's policy actions.
A Governor's term is fourteen years. There are cases, however, when a Federal Reserve Governor serves longer than fourteen years. For example, William McChesney Martin, Jr., served as a member of the Board of Governors — as Chairman of the Board of Governors — for nearly nineteen years because he was appointed to complete another person's term and was then appointed to his own term.
William McChesney Martin, Jr., the longest serving chair of the Board of Governors
The appointments to the Board of Governors are staggered – one term expiring every two years. Terms are staggered to provide the Fed political independence as a central bank, ensuring that one president is not able to take advantage of his power to appoint Governors by "stacking the deck" with those who favor the president's policies. The Board of Governors must be non-partisan and act independently. In addition to independence, the staggered terms enable stability and continuity on the Board of Governors. The seven Governors, according to the original Federal Reserve Act, should represent the nation’s financial, agricultural, industrial, and commercial interests. Geography is a factor, too, as every Governor must be selected from a different Federal Reserve District. Recently, Congress directed that at least one of the Governors have experience in community banking. The seven Governors, along with a host of economists and support staff, write the policies that ensure financially sound banks and a stable and strong national economy.
Governors actively lead committees that study prevailing economic issues — from affordable housing and consumer banking laws to interstate banking and electronic commerce. The Board of Governors also exercises broad supervisory control over certain state-chartered financial institutions, called member banks, as well as the companies that own banks (bank holding companies). This control ensures that commercial banks operate responsibly and comply with federal regulations and that the nation's payments system functions smoothly. In addition, the Board of Governors oversee the activities of Reserve Banks, approving the appointments of their presidents and three members of the Reserve Bank's boards of directors. The Governors' most important responsibility is participating on the Federal Open Market Committee (FOMC), the committee that directs the nation's monetary policy.
The current Chair of the Board of Governors is Jerome Powell.
Heading the Board of Governors are a chairman and vice chairman, who are Governors that the president of the United States appoints to serve four-year terms. The current Chair of the Board of Governors is Jerome Powell. This is a highly visible position.
To learn more about Jerome Powell, the current Chair of the Board of Governors, click here.
To learn more about the members of the Board of Governors, click here.
The chair reports twice a year to Congress on the Fed's monetary policy objectives, testifies before Congress on numerous other issues and meets periodically with the secretary of the Treasury. Other Board of Governors officials are also called to testify before Congress, and they maintain regular contact with other government organizations as well. If you would like to read current speeches and testimony from members of the Board of Governors, click here.