Historical Echoes: FOMC … “Minutes” by Minutes
Although the Federal Reserve was founded in 1913, the Federal Open Market Committee, or FOMC, wasn’t created until passage of the Banking Act of 1933. Congress established the name and legal structure of the FOMC as a formal committee of the twelve Reserve Banks. In 1935, a System reorganization added the seven-member Board of Governors to the twelve Reserve Bank presidents—uniting the centralized and decentralized components of the Fed. In the Banking Act of 1935, Congress mandated that only five of the twelve Reserve Bank presidents would vote at any one time, along with the seven governors. The first FOMC meeting convened a year later, in March 1936.
Thanks to a multi-year transparency initiative, numerous FOMC documents—including the minutes of the first meeting, held on March 18 and March 19—are now available on the Board’s website. The minutes of that meeting indicate how private the Committee intended to be:
“The proceedings, deliberations, discussions, and actions of the Committee, except as required by law and except as authorized by the Committee, shall be strictly confidential, and no information shall be released except as authorized by the Committee and in the annual report required to be made to Congress by Section 10 of the Federal Reserve Act as amended. Except as herein provided, no reports on the meeting of the Committee shall be made to any person or persons whatsoever.”
Allan H. Meltzer, in A History of the Federal Reserve, Volume 2, Book 1, 1951-1969, recounts that Wright Patman (Chairman of the Committee on Banking and Currency, 1963-75), while serving as Chairman of the Joint Economic Committee, requested and received copies of the 1960 FOMC minutes. Prior to this action, it was unprecedented for the Federal Reserve to release a full year of minutes. In a July 21, 1961, letter to Chairman Patman, Federal Reserve Chairman William McChesney Martin indicated the Fed’s willingness to supply the minutes, but requested that they be kept confidential. The FOMC minutes remained confidential until 1964, when the Committee began releasing them with an approximate five-year lag. The records were deposited in the National Archives for use by scholars and others interested in monetary policy.
In February 1993, the FOMC minutes first appeared in their present form. From that time until December 2004, they were published approximately three days after each FOMC’s subsequent meeting. In December 2004, the Committee decided to expedite the release. Since then, the minutes have been made public three weeks after the date of the current meeting’s policy decision, thus shortening the release lag by an average of about three weeks.
The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.
Kathleen McKiernan is a research librarian in the Federal Reserve Bank of New York’s Research and Statistics Group.