Define: Federal Reserve Board

Business, Legal & Accounting Glossary

Definition: Federal Reserve Board

What is the dictionary definition of Federal Reserve Board?

Dictionary Definition

The Federal Reserve Board or the ‘Fed’ as it’s known, is the U.S. central bank – the equivalent of our own Bank of England.

The US central bank is actually made up of 12 Federal Reserve Banks from across the country.


Full Definition of Federal Reserve Board

The Federal Reserve Board is the Board of Governors of the Federal Reserve System, or Fed, the US central bank.

The Federal Reserve Board sets the Fed’s monetary policy.

Implementation of most Federal Reserve Board monetary policy objectives occurs in the form of open market operations conducted by the Federal Open Market Committee, or FOMC, in New York. Federal Reserve Board members, including the Chairman and Vice-Chairman, are political appointees.

Federal Reserve Board meetings are also attended by a rotating subset of the 12 individual Federal Reserve Bank branch presidents.

Some Federal Reserve Board meetings are open to the public, but meetings about monetary policy are always closed.

The Federal Reserve Board meets in Washington, DC, generally twice each month.

The ‘Fed’s’ role is :

  • to control the issue of banknotes
  • to manage public debt and the issuing of government bonds
  • to pay a key role in carrying out monetary policy by setting interest rates and advising on policy.

The tool by which the ‘Fed’ controls monetary policy is via movements in the ‘Fed Funds’ interest rate. This is the interest rate at which banks in the U.S. lend to themselves. It’s a short term (day to day) rate.

It’s important, but not as influential as the ‘discount rate’ – the equivalent of base rates in the U.K.

The sheer size of the U.S. economy traditionally means that changes in interest rates announced in Washington immediately have a knock-on effect in the London financial markets as investors re-adjust to lower U.S. borrowing costs.

Clearly, if U.S. interest rates are falling, it may persuade some investors and speculators to move cash out of the dollar, in favour of the Pound, Euro etc.


Cite Term

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Page URL
Modern Language Association (MLA):
Federal Reserve Board. Payroll & Accounting Heaven Ltd. April 10, 2020
Chicago Manual of Style (CMS):
Federal Reserve Board. Payroll & Accounting Heaven Ltd. (accessed: April 10, 2020).
American Psychological Association (APA):
Federal Reserve Board. Retrieved April 10, 2020, from website:

Definition Sources

Definitions for Federal Reserve Board are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 15th February, 2020