Chair of the Federal Reserve

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Chair of the Board of Governors of the Federal Reserve System
Seal of the United States Federal Reserve Board.svg
Seal of the Board of Governors
Flag of the United States Federal Reserve.svg
Jerome H. Powell.jpg
Incumbent
Jerome Powell

since February 5, 2018
United States Federal Reserve System
StyleMr. Chairman
Member ofBoard of Governors
Open Market Committee
Reports toUnited States Congress
SeatEccles Building
Washington, D.C.
AppointerPresident
with Senate advice and consent
Term lengthFour years, renewable (as Chair)
14 years, non-renewable (as Governor)
Constituting instrumentFederal Reserve Act
FormationAugust 10, 1914; 107 years ago (1914-08-10)
First holderCharles Sumner Hamlin
SalaryExecutive Schedule, Level I[1]
Websitewww.federalreserve.gov

The chair of the Board of Governors of the Federal Reserve System is the head of the Federal Reserve, which is the central banking system of the United States. The chair is the "active executive officer" and shall preside at meetings of the Board of Governors of the Federal Reserve System.[2]

The chair serves a four-year term after being nominated by the President of the United States and confirmed by the United States Senate; the officeholder serves concurrently as member of the Board of Governors. The chair may serve multiple terms (consecutively or non-consecutively), pending a new nomination and confirmation at the end of each term, with William McChesney Martin as the longest serving chair from 1951 to 1970 and Alan Greenspan as a close second. The chairs cannot be dismissed by the president before the end of their term.[3]

The current chair is Jerome Powell, who was sworn in on February 5, 2018.[4][5][6][7] He was nominated to the position by President Donald Trump on November 2, 2017 and later confirmed by the Senate.[8]

1935 reorganization[edit]

Section 203 of the Banking Act of 1935 changed the name of the "Federal Reserve Board" to the "Board of Governors of the Federal Reserve System," the "governor" of the Board as the "chairman" and the "vice governor" as the "vice chairman" of the Board, and renamed "members" of the Board as "governors."[9] The Banking Act of 1935 also made the following structural changes:

  • increased the number of members of the Board appointed by the President from six to seven
  • required the President to designate one of the persons appointed as "chairman" of the Board and one as "vice chairman" of the Board, each to serve in such role for a term of four years
  • specified that the appointive members in office on the date of the act should continue to serve until February 1, 1936, or until their successors were appointed and had qualified; thereafter, the members' terms should be 14 years
  • specified that the ex officio members in office on the date of the act (the Secretary of the Treasury and the Comptroller of the Currency) were to continue to serve as ex officio members only until February 1, 1936, but made no further provision for ex officio members
  • provided that the "chairman of the Board, subject to its supervision, shall be its active executive officer"

In the 1935 Act, the district heads, who had been labeled the governors, received the title of president (e.g., "president of the Federal Reserve Bank of St. Louis" ).[10]

The directors' salaries were significantly lower (at $12,000 when first appointed in 1914[11]) and their terms of office were much shorter prior to 1935. In effect, the Federal Reserve Board members in Washington, D.C., were significantly less powerful than the presidents of the regional Federal Reserve Banks prior to 1935.[12]

Appointment process[edit]

Federal Reserve chairs (from left): Janet Yellen, Alan Greenspan, Ben Bernanke, and Paul Volcker on May 1, 2014.

As stipulated by the Banking Act of 1935, the president appoints the seven members of the Board of Governors; they must then be confirmed by the Senate and serve fourteen-year terms.[2][13][14]

The nominees for chair and vice-chair may be chosen by the president from among the sitting governors for four-year terms; these appointments are also subject to Senate confirmation.[15] The Senate Committee responsible for vetting a Federal Reserve chair nominee is the Senate Committee on Banking.

Duties of the Fed chair[edit]

By law, at meetings of the Board the chairman shall preside, and, in his absence, the vice chairman shall preside. In the absence of the chairman and the vice chairman, the Board shall elect a member to act as chairman pro tempore.[16]

Under the chair’s leadership, the Board’s responsibilities include analysis of domestic and international financial and economic developments. The board also supervises and regulates the Federal Reserve Banks, exercises responsibility in the nation’s payments system, and administers consumer credit protection laws.[17]

One of the chair's most important duties is to serve as the chair of the Federal Open Market Committee (FOMC), which is critical in setting short-term U.S. monetary policy.

By law, the chair reports twice a year to Congress on the Federal Reserve's monetary policy objectives. He or she also testifies before Congress on numerous other financial issues and meets periodically with the treasury secretary, who is a member of the president's Cabinet.[18]

Conflict of interest law[edit]

The law applicable to the chair and all other members of the board provides (in part):

No member of the Board of Governors of the Federal Reserve System shall be an officer or director of any bank, banking institution, trust company, or Federal Reserve bank or hold stock in any bank, banking institution, or trust company; and before entering upon his duties as a member of the Board of Governors of the Federal Reserve System he shall certify under oath that he has complied with this requirement, and such certification shall be filed with the secretary of the Board.[19]

Salary[edit]

Chair of the Federal Reserve is a Level I position in the Executive Schedule and thus earns the salary prescribed for that level (US$221,400, as of January 2021).[20][1]

List of Fed chairs[edit]

The following is a list of past and present chairs of the Board of Governors of the Federal Reserve System. A chair serves for a four-year term after appointment, but may be reappointed for several consecutive four-year terms. Since the Federal Reserve was established in 1914, the following people have served as chair.[a][21]

# Portrait Name
(birth–death)
Term of office Tenure length First appointed by
Start of term End of term
- William-gibbs-mcadoo-desk.jpg William Gibbs McAdoo[b]
(1863–1941)
December 23, 1913 August 10, 1914 230 days ex officio
1 HAMLIN, CHARLES S. ASSISTANT SECRETARY OF THE TREASURY, 1913- LCCN2016864808 (cropped).jpg Charles Sumner Hamlin[c]
(1861–1938)
August 10, 1914 August 9, 1916 1 year, 365 days Woodrow Wilson
2 William P.G. Harding.jpg William P. G. Harding[d]
(1864–1930)
August 10, 1916 August 9, 1922 5 years, 364 days
3 Daniel R. Crissinger cropped.jpg Daniel Richard Crissinger[e]
(1860–1942)
May 1, 1923 September 15, 1927 4 years, 137 days Warren G. Harding
4 Chair Roy A Young 140501.jpg Roy A. Young
(1882–1960)
October 4, 1927 August 31, 1930 2 years, 331 days Calvin Coolidge
5 Portrait of Eugene Meyer.jpg Eugene Meyer
(1875–1959)
September 16, 1930 May 10, 1933 2 years, 236 days Herbert Hoover
6 Eugene R Black 1934 (cropped).jpg Eugene Robert Black
(1873–1934)
May 19, 1933 August 15, 1934 1 year, 88 days Franklin D. Roosevelt
7 Marriner Eccles (cropped).jpg Marriner S. Eccles[c]
(1890–1977)
November 15, 1934 January 31, 1948[f] 13 years, 77 days
8 00035 DUP (14083184875).jpg Thomas B. McCabe
(1893–1982)
April 15, 1948 March 31, 1951 2 years, 350 days Harry S. Truman
9 William McChesney Martin jr.jpg William McChesney Martin
(1906–1998)
April 2, 1951 January 31, 1970 18 years, 304 days
10 ArthurBurns USArmyPhoto 1955.jpg Arthur F. Burns
(1904–1987)
February 1, 1970 January 31, 1978[g] 7 years, 364 days Richard Nixon
11 G. William Miller.jpg G. William Miller
(1925–2006)
March 8, 1978 August 6, 1979 1 year, 151 days Jimmy Carter
12 Paulvolcker.jpg Paul Volcker
(1927–2019)
August 6, 1979 August 11, 1987 8 years, 5 days
13 Alan Greenspan color photo portrait.jpg Alan Greenspan
(born 1926)
August 11, 1987 January 31, 2006[h] 18 years, 173 days Ronald Reagan
14 Ben Bernanke official portrait.jpg Ben Bernanke[d]
(born 1953)
February 1, 2006 January 31, 2014 7 years, 364 days George W. Bush
15 Janet Yellen official Federal Reserve portrait.jpg Janet Yellen[d][i]
(born 1946)
February 3, 2014 February 3, 2018 4 years, 0 days Barack Obama
16 Jerome H. Powell.jpg Jerome Powell[d]
(born 1953)
February 5, 2018 Incumbent 3 years, 299 days Donald Trump

See also[edit]

Notes[edit]

  1. ^ Chair was originally known as "Governor" before August 23, 1935, and were then designated as "Chairman" until Yellen became the first woman to be chair on February 3, 2014.
  2. ^ Upon passage of the Federal Reserve Act on December 23, 1913, U.S. secretary of the treasury became ex officio chairman of the Federal Reserve Board and a member of the Reserve Bank Organization Committee (RBOC). Secretaries to serve in this role until the Banking Act of 1935, approved Aug. 23, 1935, which became effective on Feb. 1, 1936, ended ex-officio membership at the Federal Reserve. Fed leader initially designate as "Governor and Active Executive Officer of the Federal Reserve Board" became the "Chairman of the Board of Governors of the Federal Reserve System" after that. For this list Governors perceived as heads of the Federal Reserve System since establishment of position; because, unlike treasury secretaries, appointed members of the Board does not serve at the pleasure of the President and cannot be dismissed until their term of office expires.
  3. ^ a b Served as a member of the Board of Governors after the term as Fed chair.
  4. ^ a b c d Served as a member of the Board of Governors prior the term as Fed chair.
  5. ^ Served as an ex-officio member of the Federal Reserve Board has been appointed comptroller of the currency from March 17, 1921 to April 30, 1923. Comptrollers of the Currency to serve in this role until the implementation of the Banking Act of 1935 on Feb. 1, 1936.
  6. ^ Served as chairman pro tempore from February 3, 1948 to April 15, 1948.
  7. ^ Served as chairman pro tempore from February 1, 1978 to March 7, 1978, and remained a member of the Board until March 31, 1978.
  8. ^ Served as chairman pro tempore from March 3, 1996 to June 20, 1996, while awaiting confirmation by the United States Senate for his third term as chairman.
  9. ^ Served as Fed vice chair prior the term as Fed chair.

References[edit]

  1. ^ a b 5 U.S.C. § 5312
  2. ^ a b see 12 U.S.C. § 242
  3. ^ "Can the President Fire the Chairman of the Federal Reserve?". Archived from the original on July 27, 2020. Retrieved August 26, 2019.
  4. ^ "Jerome H. Powell sworn in as Chair of the Board of Governors of the Federal Reserve System". Board of Governors of the Federal Reserve System. Archived from the original on February 6, 2018. Retrieved February 5, 2018.
  5. ^ Appelbaum, Binyamin (February 4, 2018). "Powell Takes Over as Fed Chief as Economy Starts to Show Strain". The New York Times. ISSN 0362-4331. Retrieved February 5, 2018.
  6. ^ NPR. "Senate Confirms Jerome Powell As New Federal Reserve Chair". Retrieved February 3, 2018.
  7. ^ Cox, Jeff (January 31, 2018). "Yellen leaving Fed Saturday, Powell to be sworn in Monday". CNBC. Retrieved February 3, 2018.
  8. ^ Gensler, Lauren (November 2, 2017). "Trump Taps Jerome Powell As Next Fed Chair In Call For Continuity". Forbes.
  9. ^ Sec. 203, Banking Act of 1935, Public Law no. 305, 49 Stat. 684, 704 (Aug. 23, 1935).
  10. ^ Richardson, Gary; Komai, Alejandro; Gou, Michael (November 22, 2013). "Banking Act of 1935". www.federalreservehistory.org. Archived from the original on November 21, 2020. Retrieved June 12, 2021.
  11. ^ "The Reserve Board Nominations". The Independent. July 20, 1914. Retrieved August 21, 2012.
  12. ^ Meltzer, Allan H. (2003). A history of the Federal Reserve: Volume 1, 1913-1951. Chicago: University of Chicago Press.
  13. ^ "The Fed - Board Members". Board of Governors of the Federal Reserve System. February 21, 2018. Retrieved June 1, 2018.
  14. ^ "The Structure of the Federal Reserve System". Federalreserve.gov. Retrieved April 24, 2015.
  15. ^ Federal Reserve (January 16, 2009). "Board of Governors FAQ". Federal Reserve. Archived from the original on January 17, 2009. Retrieved January 16, 2009.
  16. ^ see 12 U.S.C. § 244
  17. ^ "The Structure and Functions of the Federal Reserve System". www.federalreserveeducation.org. February 21, 2019. Retrieved June 1, 2018.
  18. ^ "Chair of the Federal Reserve Board". www.stlouisfed.org. February 12, 2019. Retrieved June 12, 2018.
  19. ^ 12 U.S.C. § 244
  20. ^ "Salary Table No. 2021-EX Rates of Basic Pay for the Executive Schedule (EX)" (PDF).
  21. ^ "Chairs". Membership of the Board of Governors of the Federal Reserve System, 1914–present. The Federal Reserve Board. February 5, 2018. Retrieved February 6, 2018.

Further reading[edit]

External links[edit]