The powerful but little understood Federal Reserve Open Market Committee is meeting today and tomorrow. Here’s a little about who they are and the important changes they’ve been through.
The Federal Reserve Bank of Cleveland (Photo by Craig Hatfield / CC BY 2.0)
Claudia Sahm first came to work at the Fed just as the world started crumbling — back in 2007, at the beginning of the financial crisis that eventually pulled the whole world into the Great Recession.
Like most of her new colleagues, Sahm had just been recruited from academia to join the 400 or so other Ph.D. economists who work at the offices of the Federal Reserve Board of Governors in Washington, D.C. They analyze economic data and offer up insights and analysis to advise the Federal Open Market Committee, or FOMC, the most important decision-making body of the Federal Reserve.
Every six weeks, the FOMC meets to debate and make decisions on monetary policy — including whether to raise interest rates, lower them, or hold them at current levels. It’s the most significant way the Fed influences the economy — lowering interest rates promotes growth by encouraging households to take out loans to buy homes, cars, appliances or other major purchases. It also encourages more businesses to take out loans to expand and potentially hire new workers. Raising interest rates discourages all the above.
In the weeks leading up to each meeting, Sahm and her hundreds of colleagues compiled their analyses and insights into the “...
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