To know the way the Fed works, you have to understand its framework. The Federal Reserve System has three elements. The Board of Governors directs policy that is monetary. Its seven people have the effect of establishing the discount price and also the reserve requirement of member banks. Staff economists offer all analyses. They range from the Beige that is monthly Book the semi-annual Monetary are accountable to Congress.
The Federal Open marketplace Committee (FOMC) oversees open market operations. Which includes establishing the prospective for the fed funds price, which guides interest levels. The seven board people, the president regarding the Federal Reserve Bank of the latest York, and four of this remaining 11 bank presidents are members.