Monetary Policy

Our Role in Monetary Policymaking

Our economists' scientific research, forecasts, and analyses support our Bank President in the deliberations of the Federal Open Market Committee (FOMC) at meetings of the Board of Governors of the Federal Reserve System in Washington, DC, where monetary policy is determined.  Our economists also support the Board of Directors of the Boston Fed, who make recommendations to the Board in Washington concerning the nation's primary credit rate (discount rate). Policy support for the Bank President is conducted through memoranda, briefings, presentations, and longer-term research projects. The briefings take place in the weeks leading up to each FOMC meeting. These briefings represent empirical investigations of the issues viewed as the most relevant for the upcoming meeting. Our economists also routinely provide briefings to our Board of Directors. These briefings summarize in-depth examinations of policy issues relevant for the primary credit rate recommendation.

FOMC Deliberations

As the head of one of the 12 Federal Reserve District Banks, our Bank President, Eric Rosengren, participates in the eight FOMC meetings held each year and is a voting member of the Committee on a rotating basis.

At each FOMC meeting, following discussion and debate regarding the current condition and desired path of the nation's economy, a decision is made by a vote of the FOMC regarding the appropriate direction of open market operations to undertake to influence short-term interest rates via the federal funds rate, the interest rate at which depository institutions lend balances at the Fed to each other overnight.

Boston Fed Directors Meetings and the Discount Rate

Our research economists also support the Boston Fed's Board of Directors with research and analysis at periodic meetings where the Directors vote on a recommendation for the discount rate, which is the interest rate charged to depository institutions on loans from their regional Fed.

The discount rate is established by each Reserve Bank's Board of Directors, subject to the review and determination of the Board of Governors of the Federal Reserve System.

Publications & Data