No one person is in charge of the Federal Reserve System. Authority is split across a seven-member Board of Governors in Washington, a Chair designated from among those governors, a twelve-member Federal Open Market Committee that sets monetary policy, and twelve regional Reserve Bank presidents who share in the policy vote on a rotating basis. Each layer has powers the others cannot exercise alone, and that is by design.
The Board of Governors Sits at the Top
The Board of Governors is the central governing body of the Federal Reserve System. It has seven members, each nominated by the President and confirmed by the Senate for staggered 14-year terms.1Office of the Law Revision Counsel. 12 USC 241 – Creation, Membership, Compensation and Expenses No two governors may come from the same Federal Reserve district, and the President is directed to consider fair representation of financial, agricultural, industrial, and commercial interests. At least one member must have primary experience working in or supervising community banks with less than $10 billion in total assets.2Board of Governors of the Federal Reserve System. Section 10 – Board of Governors of the Federal Reserve System
The Board’s legal powers are broad. It can examine the accounts of every Federal Reserve Bank and every member bank and require whatever reports it deems necessary.3Office of the Law Revision Counsel. 12 USC 248 – Enumerated Powers It reviews and approves the discount rate that regional Reserve Banks charge commercial banks for short-term loans; each regional bank proposes a rate, and the Board either approves or adjusts it.4Federal Reserve Board. Discount Window It sets reserve requirements, although those ratios have been at zero percent since March 2020 and remain at zero for 2026.5Federal Register. Regulation D – Reserve Requirements of Depository Institutions It writes consumer protection rules such as Regulation Z under the Truth in Lending Act.6eCFR. 12 CFR Part 226 – Truth in Lending (Regulation Z)
Emergency lending is a Board power with a high bar. Under Section 13(3) of the Federal Reserve Act, the Board can authorize emergency lending only with an affirmative vote of at least five of the seven governors and prior approval from the Secretary of the Treasury. The program must be broadly available rather than a rescue of a single failing firm, the collateral must be sufficient to protect taxpayers, and insolvent borrowers may not participate.7Federal Reserve Board. Section 13 – Powers of Federal Reserve Banks
The Chair Leads the Board but Does Not Run It Alone
The Chair is the most visible face of the Federal Reserve. The President designates the Chair from among the sitting governors, and the Senate confirms the designation, for a four-year term. Two Vice Chairs are designated the same way: one steps in when the Chair is absent, and the Vice Chair for Supervision develops policy recommendations on the oversight of banks and financial firms.8Office of the Law Revision Counsel. 12 USC 242 – Ineligibility to Hold Office in Member Banks, Qualifications and Terms of Office of Members, Chairman and Vice Chairman, Oath of Office
The statute describes the Chair as the Board’s “active executive officer” who acts “subject to its supervision.” That language matters. The Chair leads meetings, sets the agenda, and speaks for the institution, but the Chair cannot set the discount rate, approve emergency lending, or change monetary policy by personal decision. Those powers belong to the Board or to the Federal Open Market Committee acting as a body.
Federal law requires the Chair to deliver a semiannual Monetary Policy Report and testify before both the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services, a requirement rooted in the Full Employment and Balanced Growth Act of 1978. Those hearings are the most direct point of accountability between the Fed’s leadership and Congress.
The Federal Open Market Committee Sets Monetary Policy
Interest-rate policy is not made by the Board alone. The Federal Open Market Committee, or FOMC, is the body that sets the target range for the federal funds rate and directs the buying and selling of government securities that moves the money supply. No Reserve Bank may conduct or refuse open-market operations except as directed by the committee.9Office of the Law Revision Counsel. 12 USC 263 – Federal Open Market Committee, Creation, Membership, Regulations Governing Open-Market Transactions
The FOMC has twelve voting members: the seven governors plus five of the twelve regional Reserve Bank presidents. The president of the Federal Reserve Bank of New York holds a permanent voting seat. The other four voting seats rotate annually among the remaining eleven regional bank presidents in a fixed pattern. All twelve regional presidents attend meetings and participate in the discussion, but only those in voting seats cast votes.
The statute requires at least four meetings a year; in practice the FOMC meets eight times.10Federal Reserve Board. Meeting Calendars and Information The federal funds rate the committee sets ripples through mortgage rates, auto loans, credit cards, and business borrowing costs. Because governors always outnumber regional presidents on the committee, Washington carries structural weight, but a Chair without allies among the other governors and voting presidents cannot force a policy change.
The Twelve Regional Reserve Banks
The system’s decentralized design places twelve regional Reserve Banks across the country, headquartered in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.11Federal Reserve Board. Federal Reserve Banks Each is an independent corporate entity, and each is subject to the Board of Governors’ oversight.
Each regional bank is led by a president who serves as chief executive for a five-year term. The president is appointed by the bank’s Class B and Class C directors, with the approval of the Board of Governors.12Office of the Law Revision Counsel. 12 USC 341 – General Enumeration of Powers Regional presidents collect information from local business leaders and community contacts and bring that perspective into FOMC deliberations.
Each regional bank has a nine-member board of directors split into three classes. Class A directors, three in number, are chosen by and represent the commercial banks that are members of the Federal Reserve System. Class B directors, also three, are elected by the same member banks but represent the public, with consideration given to agriculture, commerce, industry, services, labor, and consumers. Class C directors, the final three, are designated by the Board of Governors in Washington and also represent the public.13Office of the Law Revision Counsel. 12 USC 302 – Number of Members, Classes
How Fed Leaders Get In, and How They Can Be Removed
All seven governors reach the Board the same way: presidential nomination, Senate hearings, and a confirmation vote. The staggered 14-year terms expire one at a time, every two years on February 1 of even-numbered years.14Federal Reserve Board. Board Members Even a two-term president typically fills only a handful of seats through normal expiration, which is the mechanism that keeps any single administration from remaking the Board quickly.
The Chair and Vice Chairs are chosen from among sitting governors for four-year leadership terms, each requiring its own Senate confirmation. A governor whose four-year leadership term ends may keep serving as a regular Board member for the remainder of the underlying 14-year term.15Federal Reserve Board. Board Members
Governors can be removed before their terms expire only “for cause,” a standard written directly into the statute.16Office of the Law Revision Counsel. 12 US Code 242 – Ineligibility to Hold Office in Member Banks, Qualifications and Terms of Office of Members, Chairman and Vice Chairman, Oath of Office Under longstanding legal precedent, “for cause” has been understood to mean inefficiency, neglect of duty, or misconduct in office, and the wrongdoing must be proven, not merely alleged. The President cannot fire a governor for disagreeing on policy. In a May 2025 order, the Supreme Court reinforced that protection, describing the Federal Reserve as a “uniquely structured, quasi-private entity” with deep historical roots in the tradition of the country’s earliest central banks.
Compensation is set on the federal Executive Schedule. As of 2026, the Chair earns $228,000 per year at Executive Level II, and the other governors each earn $209,600 per year at Executive Level III.17OPM.gov. Salary Table No. 2026-EX
Why No One Can Simply Take Over
Two structural features keep control diffuse. The first is the removal protection above. The second is money. The Fed does not depend on congressional appropriations. It earns interest on its holdings of Treasury securities and mortgage-backed securities and charges banks for supervisory services; in a typical year the surplus is transferred to the U.S. Treasury.18Office of the Law Revision Counsel. 12 US Code 289 – Dividends and Surplus Funds of Reserve Banks Because the Fed funds itself, neither the White House nor Congress can pressure it through the budget.
The practical answer to who is in charge, then, is layered. The Board of Governors holds regulatory and supervisory authority. The Chair leads the Board and speaks for the institution, but acts subject to the Board’s supervision. The FOMC, blending governors and regional presidents, sets monetary policy. The twelve regional banks carry out operations in their districts and feed regional intelligence into national decisions. Power is shared on purpose, and that is the system as Congress wrote it.