The Federal Open Market Committee (FOMC) is the main team behind the United States ‘s Federal Reserve that is controlling cash supply of the country by using the open market operations.
Birth
The FOMC was founded in the year 1913 when the Federal Reserve Act of 1913 provided the Fed duty over the oil policies of the country in reply to the big financial panic and bank runs taken place especially during 1907.
Mission
The main aim of the committee is to evaluate the economic and financial conditions of the country. Then, FOMC has to devise most desirable and appropriate monetary policy for the country. In addition, FOMC also has to control the inflation rate through open market operations. The main aim of the committee is also to fulfill this target through establishment of a target for the Federal funds rate which is the cost that is charged by banks to each other on overnight borrowings as well. The selling of government securities to banks was done to lessens the amount of funds that they would be able to lend, effectively increasing the interest rate.In addition, buying government securities from the banks increases their current financial funds and thus decreases the interest rate.
Members
The composition of the FOMC is made up of 12 full members, the 7 members of the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York president. Moreover, it also includes 11 Reserve Bank presidents, who have been appointed on a 1-year rotating term.
The present members are as follows:
2017 Committee Members
Janet L. Yellen, Board of Governors, Chair William C. Dudley, New York, Vice Chairman Lael Brainard, Board of Governors Charles L. Evans, Chicago Patrick Harker, Philadelphia Robert S. Kaplan, Dallas Neel Kashkari, Minneapolis Jerome H. Powell, Board of Governors Randal K. Quarles, Board of Governors
Alternate Members
Raphael W. Bostic, Atlanta Loretta J. Mester, Cleveland Mark L. Mullinix, First Vice President, Richmond Michael Strine, First Vice President, New York John C. Williams, San Francisco