Key Figures in the History of the FOMC
Benjamin Strong (1872-1928)
Governor of the Federal Reserve Bank of New York from its opening in 1914 until his death in 1928, and the dominant figure in American monetary policy during that period. Strong grasped earlier than most that buying and selling government securities could be used deliberately to influence credit conditions, rather than merely to earn income for the Reserve Banks, and he pushed for the coordination that produced the first informal open market committee in the early 1920s. His authority rested on the New York bank's position at the centre of financial markets rather than on any statute. Later scholarship, including Friedman and Schwartz, argued that his death left the System without effective leadership going into the crisis of 1929.
Marriner Eccles (1890-1977)
The Utah banker who chaired the Federal Reserve Board from 1934 to 1948 and wrote the modern FOMC into law. Eccles believed that the decentralised design of 1913 had failed catastrophically between 1929 and 1933, and the Banking Act of 1935 he championed shifted decisive authority to Washington: the seven governors plus five Reserve Bank presidents, with the governors holding a permanent majority, and no Reserve Bank free to opt out of the committee's decisions. He also removed the Treasury Secretary from the Board, an early structural step toward independence — though the wartime bond-yield peg during his own tenure showed how much further that fight had to go.
William McChesney Martin (1906-1998)
Chair from 1951 to 1970, Martin ran the FOMC in the era immediately after the Accord and established the working conventions of a genuinely independent committee. He took the collegial character of the body seriously, cultivating consensus rather than dictating outcomes, and he insisted that the Fed act on its own reading of the economy even under direct pressure from the White House. His formulation that the central bank must remove the punch bowl just as the party gets going is a statement about committee behaviour as much as about interest rates: it argues that the FOMC must move before the case for moving is obvious to everyone, which is precisely the sort of decision a committee finds hardest to reach.
Alan Greenspan (born 1926)
Chair from 1987 to 2006 and the person under whom the FOMC stopped being a secretive body. The February 1994 decision to announce a policy change the day it was made ended a tradition stretching back to the institution's founding, and by the late 1990s the committee was publishing a statement after every meeting. Greenspan's personal communication style remained famously oblique — he once joked that if his listeners understood him clearly, they had misunderstood him — but the institutional changes made during his tenure created the framework of same-day statements, published risk assessments, and market expectations of guidance that his successors built on.
Ben Bernanke (born 1953)
Chair from 2006 to 2014 and the architect of the FOMC's modern communications regime. Bernanke had argued as an academic that transparency makes monetary policy more effective, because policy works largely through expectations about the future path of rates. As chair he expanded the Summary of Economic Projections in 2007, introduced regular post-meeting press conferences in April 2011, published the first dot plot in January 2012, and issued the Statement on Longer-Run Goals establishing the 2 percent target the same month. He also had to use language itself as a policy tool, since once the funds rate reached its floor, forward guidance was one of the few instruments left.