Annual Report 2008| Federal Reserve Bank of St. Louis

Central to promoting stable prices and economic growth

While national attention is typically focused on the actions of Federal Reserve Chairman Ben Bernanke and the Board of Governors in Washington, D.C., Fed structure dictates an integral role for regional Reserve banks in keeping prices stable and the economy growing. As one of 12 regional Reserve banks, the Federal Reserve Bank of St. Louis contributes to the policy debate about how to revive the flagging economy primarily through its president’s participation on the Federal Open Market Committee (FOMC). In 2008, this debate was one of the Bank’s highest priorities.

In a typical year, the FOMC meets eight times. At each meeting, the committee establishes a target or range for the federal funds rate, which is the interest rate that banks charge each other for overnight loans. For many years, the fed funds rate target has been the Fed’s primary monetary policy tool. During 2008, that policy tool would prove to be only one of many tools employed, as the Fed began shifting its emphasis from influencing short-term interest rates to improving the functioning of credit markets and increasing the supply of credit to households and businesses.

For Bank President Jim Bullard, who took over the helm of the St. Louis Fed in April 2008, the year proved anything but normal. Regular FOMC meetings were supplemented by overnight and weekend conference calls, as swiftly unfolding financial market events dictated an equally swift policy response from the U.S. Treasury or the Federal Reserve. Overall, the Fed moved decisively in response to market events.


While many Fed actions emanated out of Washington, D.C., the Eighth Federal Reserve District played its part.


  • The smooth transition in leadership from William Poole, whose widely respected 10-year term as head of the Bank ended in March 2008, to Jim Bullard. An economist and 18-year veteran of the Research department, Bullard was a Bank vice president before his promotion.

  • An intensified research focus on unconventional tools of monetary policy—particularly the monetary aggregates—in the wake of a fed funds rate that was essentially zero.

  • A new record in the number of articles by St. Louis Fed economists published in peer-reviewed economics journals.

  • A new record in citations of St. Louis Fed research publications by outside researchers.

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