The Federal Reserve Bank of Chicago

Document Sample
The Federal Reserve Bank of Chicago Powered By Docstoc
					Emily Engel Rotenberg
   Created in 1913 by Act of Congress
    ◦ Response to banking panics of 1907 and earlier

   Main functions
    ◦ Monetary policy
    ◦ Financial stability
       Bank supervision
       Payments system

   Analogous to:
    ◦ European Central Bank
    ◦ Bank of England
    ◦ Bank of Japan
   “Stable prices”
    ◦ Low and stable inflation
       Not more explicitly defined officially …
       But many describe inflation of about 2% as a desirable level

   “Maximum employment”
    ◦ Sustainable economic growth
    ◦ Unemployment not higher than its “natural rate”
   Resembles our national government
    ◦ Centralized authority with regional representation

   Board of Governors
    ◦ Located in Washington DC
    ◦ 7 members appointed by President to 14 year terms
    ◦ Chairman is Ben Bernanke

   Federal Reserve Banks
    ◦ 12 Banks spread around the country
    ◦ Technically owned by member commercial banks
    ◦ Bank presidents appointed by Boards of Directors and
      approved by the Board of Governors
                               1                       2
                      Ben S. Bernanke          Janet L. Yellen
                         Chairman              Vice Chairman

      ?                4                  5                 6             ?
Sarah Bloom Raskin Kevin M. Warsh   Elizabeth A. Duke Daniel K. Tarullo
            1                            2                               3                                4
     Eric S. Rosengren             William C. Dudley               Charles I. Plosser                Sandra Pianalto
   First District - Boston     Second District - New York     Third District - Philadelphia     Fourth District - Cleveland

            5                            6                               7                                8
       Jeffrey M. Lacker            Dennis P. Lockhart             Charles L. Evans                 James B. Bullard
   Fifth District - Richmond      Sixth District - Atlanta     Seventh District - Chicago       Eighth District - St. Louis

            9                          10                              11                              12
  Naryana Kocherlakota             Thomas M. Hoenig               Richard W. Fisher                         TBD
Ninth District - Minneapolis   Tenth District - Kansas City    Eleventh District - Dallas     John Moore - Interim President
                                                                                              Twelfth District - San Francisco
   Who makes up the FOMC:
    ◦ Seven Governors from the Board
    ◦ Twelve Presidents from District Banks
       All participate
       Five vote (New York Fed president & four others that rotate)
   What do they do:
    ◦ Formulate monetary policy
       Set federal funds rate target
   How often do the FOMC meet:
    ◦ Eight scheduled meetings a year plus „emergency‟ meetings
   FOMC decides on a target for the Federal Funds Rate

   Staff at the Federal Reserve Bank of New York conducts
    open market operations so as to hit the target

   Discussed in terms of short-term interest rates
   With fed funds rate at zero, policy looks different now

   Credit Easing is extension of our lender of last resort role

   Quantitative Easing seeks to affect long-term interest
   Stock Market Indexes are edging up
   Money Market Rates have leveled out at low
   GDP has been positive for 5 quarters
   Chicago Fed National Activity Index is slightly
    below zero
   Light Weight Vehicles sales are strong
   Housing Data is mixed
   Retail and Food Service Sales have increased
   Chicago Fed Midwest Manufacturing Index
    (CFMMI) is edging up slowly
   The Federal Reserve Board‟s industrial
    production index for manufacturing (IPMFG)
    decreased last month, but is ticking upward
   Total Payroll Employment is leveling off
   The Unemployment Rate is steady
   Unemployment Insurance Claims have been
   Average Hourly Earnings still declining
   Financial:
    ◦ From October to the beginning of November,
      long-term Treasury yields and major stock
      market indices were up.
   Big Picture:
    ◦ Real GDP grew in the 3rd quarter 2010 at a
      moderately faster pace than in the 2nd quarter,
      but growth still remained below trend.
    ◦ The three-month moving average of the CFNAI
      was steady from August to September.
   Household:
    ◦ Light vehicle sales increased in October while
      household indicators were mixed.
   Manufacturing:
    ◦ Factors were mixed over the past month (CFMMI
      & IPMFG).
   Labor Market:
    ◦ October national labor market data were steady
    ◦ September District labor market data decreased
      slightly (positive)
   The following forecasts are from the Federal
    Reserve‟s Automotive Outlook Symposium
    ◦   GDP
    ◦   Car and Light Truck Sales
    ◦   Housing Starts
    ◦   Industrial Production
    ◦   Unemployment Rate
   We…
    ◦   Travel
    ◦   Analyze risk
    ◦   Resolve risk
    ◦   Write reports
    ◦   Carry out the mission of the Supervision and
        Regulation Department
   Entry Level

   Types of Degrees

   Developmental Track
    ◦ Commissioning process

   Travel requirement

   Advancement

Shared By: