Question

How does the rotating membership of the FOMC work? Why does the president of New York's Federal Reserve Bank always have a vote in the FOMC?

Answer 1

FMOC or Federal Open Market Committee is the monitory policy agency of the Federal Reserve System. The members of the committee consists of board of governors with a total number of 12 officials(and they are the voters). It is the committee designed for economic growth and price stability.

The meetings of the committee held a number of times every year to discuss its policies. It will include discussions about the developments in the local and global financial markets and financial forecasts. In a word, the FMOC manages the money supply of the nation, makes key decisions about interest rates and the growth of the United States money supply.

Rotating seats.

In order to ensure a fair representation of all regions of the United States, a rotating seat for four groups which would last for one year, is formed. This four group include one Reserve Bank President from:

• Boston, Philadelphia, Richmond
• Chicago, Cleveland
• Atlanta, Dallas, St. Louis
• Kansas City, Minneapolis, San Francisco. The president of New York Federal Reserve Bank serves on a continuous basis. The New York Federal Reserve Bank is one of the twelve Federal Reserve Banks in the U.S. This is considered as" first among equals". And too, this is considered as the largest , most active and influential of all twelve regional Federal Banks. That is why the president of New York's Federal Reserve Bank always have a vote in the FOMC.