How much power does the Fed chair really have?

"On paper at least, the chair of the Fed doesn't seem like he or she should be that powerful. The Federal Reserve Act, which created America's central bank, established a bunch of limits on the authority of any one person to shape our economy. The Fed chair, for example, only has one out of 12 votes on the Federal Open Market Committee (FOMC), the crucial decision-making body that sets interest rates."

"Blinder served as vice chair of the Fed back in the mid-1990s. That's the Fed's number 2, right behind the head honcho, who was then Alan Greenspan. "He was the boss," Blinder says of Greenspan. And yeah, he says, Fed chairs actually do have "a great deal" of power. "Now, you wouldn't learn that by just reading the Federal Reserve Act.""

President Trump nominated Kevin Warsh to become the next chairman of the Federal Reserve's Board of Governors. The Federal Reserve Act places institutional limits on individual authority within the Fed. The Fed chair holds one of 12 votes on the Federal Open Market Committee (FOMC), the body that sets interest rates under a dual mandate of low, stable inflation and a strong labor market. The Fed chair leads both the Board of Governors and the FOMC and exercises influence beyond a single vote. Alan Blinder, a former Fed vice chair, states that Fed chairs possess a great deal of power not obvious from the Act. The chair is appointed by the president and confirmed by the Senate.

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