Behind the Scenes at the Fed: Rates and Governors

Mick Jagger. Rudolph the Red-Nosed Reindeer. The Federal Reserve chair. All these leaders have talented groups of people (or animals) behind them, but their names sometimes get lost in the shuffle. 

But where would the Rolling Stones have been without Keith Richards and Charlie Watts? Rudolph without Santa's other eight reindeer? Or the Fed chair without his or her governors and regional Reserve Bank presidents who provide insight and help set interest rate policy? 

When it comes to the Fed, most investors are familiar with names like Jerome Powell, Janet Yellen, Ben Bernanke, and Alan Greenspan—the last of whom was arguably the first Fed chairperson to achieve celebrity status. 

Though the iconic image of Greenspan is of him walking into the Fed on meeting days carrying bundles of paper and not taking questions, recent Fed leaders have held regular press conferences that pre-empted programming on financial news networks. The market often hangs on every public statement, spiking or descending in tune with their hawkish or dovish views. 

Voting Fed presidents, as well as Fed Board members, are almost as powerful as the Fed chair when it comes to having a say in interest rate policy and influencing the Treasury market. Though meetings since 2020 mostly saw unanimous votes to raise or lower rates, that unity started to crack when the Fed first cut rates in September 2024. 

There were dissenting votes on rate decisions in five of the nine meetings from September 2024 through September 2025, including two dissents at the July 2025 meeting, a relatively rare occurrence, and two more at the October 2025 meeting. That means some Fed policymakers disagreed publicly with the committee's decision on rate policy, elevating their importance. 

Fed governors and their role received fresh spotlight in mid-2025 when President Trump tried to fire Fed Governor Lisa Cook. 

President Trump said he fired Cook for alleged personal financial improprieties. But Cook—who faced no formal charges of wrongdoing and whose case was playing out in the courts at the time of publication—was nominated by President Biden. As the pick of the previous president, her views on rate policy might contrast with those of Trump and his appointees, underlining differences among Fed voters that can influence policy. 

"I think it gets lost on people that it truly is a committee, and there can be different viewpoints," said Collin Martin, managing director, fixed income strategy at the Schwab Center for Financial Research. "There is a wide range of views, so listening to Fed Chairman Jerome Powell doesn't tell the whole story. Powell tries to relay the aggregate message at the press conference after each Fed meeting, but each individual really speaks for itself, and the views can vary." 

These different viewpoints don't form in a vacuum. Fed policymakers spend time together between the eight formal annual meetings. Then, during the two-day Federal Open Market Committee (FOMC) meetings, policymakers have plenty of opportunity to debate rates and discuss the economy before making decisions. 

One thing people don't see when the Fed chair takes the podium is what happened around the table at the FOMC meeting that just ended. Though minutes of those meetings are released several weeks later, it's hard to get a true sense of how policymakers connect beyond that. 

"I get this question, 'So, do you ever see your fellow presidents?'" said former Philadelphia Fed President Patrick Harker in a recent Schwab podcast. "All the time. Because the other piece of the Fed that the public doesn't see and doesn't really need to see is the Fed is a bank. The Fed is a big bank. And so, we, the presidents and our first vice presidents and staff and reserve banks, we run the bank, we run the supervisory side of the house, we run the IT systems, the payment systems. So yeah, you see your fellow presidents all the time, at least some group of them every week." 

And when Fed policymakers aren't talking to each other, they're often talking to the public. 

"That's the beauty of the Fed having this decentralized central bank," Harker said. "I mean, we're out there all the time talking to small-business leaders. And so particularly in times where the data is backward looking and fuzzy…Getting that real-time feedback from people, that's the part of the job I loved because it gave you the color, texture, to what the economy is. And it reinforced in me the belief that often there's this image of the Fed being the…the masters of the economy, steering the ship of the economy, throttling back and forth. The Fed does not create growth. All those people out there in those communities, community by community—they're the ones that are creating growth. And it's a humbling thing, and it's important to remember that every time you enter the FOMC room and make a decision." 

Just as most companies have an organizational structure, so does the Fed. And like a lot of org. charts, it's complex. 

One confusing thing about who votes at Fed meetings is that there are two parties making up the FOMC, which decides policy. FOMC members include some from the Federal Reserve Bank and others from the Board of Governors of the Federal Reserve System. Here's how it works: 

• The seven members of the Board of Governors are nominated by the U.S. president and confirmed by the Senate. A full term is fourteen years. One term begins every two years, on February 1 of even-numbered years. These members always vote.
• The rest of the FOMC consists of the president of the Federal Reserve Bank of New York (also vice chair of the FOMC) and four of the remaining 11 Reserve Bank presidents, who serve one-year voting-member terms on a rotating basis.
• The chair of the Board of Governors and the vice chair of the Board, as well as the vice chair for supervision, are nominated by the President from among the members and are confirmed by the Senate. They serve a term of four years.
• A member's term on the Board is not affected by his or her status as chair or vice chair, meaning a Fed chair could remain on the Board if their term as governor isn't over, even if their term as Fed chair ends and they're not re-appointed.
• The chair of the Board of Governors has always been the chair of the FOMC, but they are two separate roles. Although there is a vice chair of the board, the role of the vice chair of the FOMC is actually held by the president of the New York Federal Reserve.
• The rotating seats are filled from the following four groups of banks, one bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco.
• Committee membership changes at the first regularly scheduled meeting of the year.
• Non-voting Fed presidents attend committee meetings, participate in the discussions, and contribute to the committee's assessment of the economy and policy options.
• The Federal Reserve controls the three tools of monetary policy: open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. 

In years they vote, regional Fed presidents have as much power to help set rates as board members, but in years when they're not voting, their words generally carry less weight with investors. 

Over the last decade or two, Fed meetings usually included a press conference immediately afterward led by the Fed chair. When policymakers are united about direction, these can be unexciting. But when there's division, it gets more interesting. For instance, after the Fed's October 2025 meeting, Powell said in his press conference that "strongly differing views" surfaced. For veteran Fed-watchers, this was a very strong statement by the chairman, and it led to a quick drop in chances of a rate cut at the next meeting, according to the CME FedWatch tool. 

Trump's threats to fire Powell and his attempt to fire Cook raised concerns about the Fed's independence from politics. Trump's appointment of Stephen Miran to a temporary position on the Fed's Board of Governors when a seat opened in late 2025 also caused concern, as Miran chose not to resign from his position on the White House Council of Economic Advisors. Miran said Trump hasn't told him how to vote and said he's not doing the president's bidding, according to USA Today. 

When asked about Fed independence and how the president influences members of the central bank, Harker said he's concerned and mentioned the role of Congress. 

"One, the Fed does have to respond and is accountable to Congress," Harker said. "Congress created the Fed. It's not like the Fed is out there doing its own thing with no oversight…but start with the headline. There is no example, either in this country or around the world, where the wall of independence has been breached between the fiscal side and the monetary-policy side that has turned out well."