Research economists at all 12 Reserve Banks, as well as at the Board of Governors, contribute to the policy-making process. Generally speaking, economists at Reserve Banks monitor the economies of their Districts as well as the national economy. The primary duty of the economists is to prepare their Reserve Bank president for his or her participation in FOMC meetings.
Members of the research staff gather, analyze, evaluate, and share information about the economy. Before each FOMC meeting, for example, researchers survey key industry contacts within their Districts and assemble a report called the Beige Book, which can often highlight meaningful trends in economic activity before they show up in national statistics. The Beige Book serves as an up-to-the-minute resource for FOMC discussions and its contents are widely reported in the press.
The loans and deposit data that Reserve Banks collect from depository institutions are some of the most critical statistics the Fed gathers. Such information is used in analyzing regional and national bank performance, credit demand, and other banking concerns.
Determining how to interpret all this information is the hard part, of course. At the Board of Governors, economists use data to forecast potential outcomes of various economic scenarios. All the while, the economists look for key information that will contribute to better monetary policy. The variety of research interests around the Federal Reserve System fosters a diversity of views and influences wider economic thought.
Spreading the Word
The Federal Reserve shares the viewpoints that emerge from its research. Besides producing publications for audiences of all kinds, Fed speakers address numerous groups on the economic outlook, participate in professional forums, conduct educational seminars for area teachers, provide economic information for local reporters, develop publications about the economy and the Fed for the public, and develop lessons and online tools about the economy for use in classrooms. Websites at each Reserve Bank and at the Board of Governors broaden the reach of the Federal Reserve's economic expertise.
The previous two sections described the roles of the Federal Reserve Banks and the FOMC in monetary policy. The Federal Reserve's dual mandate is to provide price stability and maximum employment. Achieving these goals requires using monetary policy to influence the money supply, interest rates, and economic growth. While the Fed's monetary policy function is the task that gets the most attention, the Federal Reserve System has many other roles that are addressed in the final section of this website.
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