 John Taylor "> | | | Good morning, it’s Saturday, Dec. 20, and there’s a lot to think about this coming week: seasonal cocktails, Christmas morning breakfast and a holiday feast. But the news is relentless, so I’m back with answers to your questions. Answering your questions We got a long question from a reader about the Federal Reserve, which I’m going to break into a few parts. To help answer these, I turned to my colleague Andrew Ackerman, who covers the Federal Reserve and monetary policy for The Post’s economics team. - What exactly does a Fed regional president do? I know they attend a meeting to vote on interest rates once every two months, but other than that, what is the job? Why are they assigned to specific cities, and how were those cities chosen?
The Federal Reserve Act, passed in December 1913, established the Federal Reserve system, which included 12 regional banks and a board of governors. The cities for those 12 regional banks were selected the following year and remain the same. They are spread throughout the United States in cities like Atlanta, Richmond, Chicago and San Francisco. The point, Andrew points out, was to establish a decentralized system where power was spread throughout the country and not just in New York and Washington. As for what the presidents do? Here’s Andrew: The 12 regional presidents run branches of the Federal Reserve that play an important role in the way the central bank sets interest rates. All 12 regional presidents participate in the policymaking committee of the Fed, although only five of them vote at the meetings in any given year. (The New York Fed chief always gets a vote, and the other four vote on a rotating basis.) If a commercial bank gets into trouble and needs to borrow in an emergency from the Fed — which was set up to be a “lender of last resort” — they do the borrowing at their regional Fed bank’s “discount window.” They also manage cash: The Fed banks have vaults of cash and ensure that currency gets distributed to banks. | | | | - Does Kansas City really need a Fed president?
This is a funny question that, clearly, the Fed has heard before. Missouri has two Federal Reserve Banks, one in St. Louis and, yes, another in Kansas City. The conventional wisdom holds that there were powerful lawmakers from Missouri that helped make that happen. In an essay on its website, the St. Louis Fed says “both cities deserved serious consideration,” even “apart from political connections.” As Andrew told me, that’s “probably not how you would design it today.” - What is the difference between a regional president and a Fed governor?
Here’s Andrew again: Fed presidents are basically in charge of these mini Fed fiefdoms. They and their branches do a lot of outreach to the local business community to get a sense of the economy’s health and to conduct research on economic conditions. They also house a team that supervises the banks in their districts. A Fed governor is on the seven-member board that oversees the entire Federal Reserve system — including the 12 Fed regional banks. A Fed bank president is appointed by boards of the regional Fed banks; Fed governors are nominated by the White House and confirmed by the Senate. | | | | What else to know Thanks to Andrew for jumping in to answer questions this week. If you have a tip or question, you can reach him on Signal at +1-202-590-6178 and find him on X @amacker. And thank you all for the questions — now, keep ’em coming. If you have more questions about the news and other stories you’ve seen in The 7, send them here. We’ll find the right person to answer them for another weekend edition of The 7. Keep reading Each weekend, The 7 team shares our favorite Post stories from the past week.  | Hannah Jewell | This week, a statue of a Black teenager who fought segregation was unveiled at the U.S. Capitol, replacing one of Confederate Gen. Robert E. Lee. This is Barbara Rose Johns’s remarkable story.  | Izin Akhabau | I found the story about how Trinidadian-born rapper and singer Nicki Minaj became a MAGA-world darling fascinating.  | Jamie Ross | This story about a 31-day Airbnb stay in D.C. that became a “nightmare” for the host had me gripped from start to finish.  | John Taylor | I shared an early version of this story with the team this week because when I read it my jaw dropped. It’s a different way to think about presidential pardons and their impact. |
