Zachary Arace

Federal Reserve Board of Governors, Washington, D.C.

I had the privilege and pleasure of using my 2012 Wellman Hill grant to intern in the Department of Monetary Affairs at the Federal Reserve Board of Governors in Washington, DC. The Board, as it is known, is the headquarters of our nation’s central bank, leading a network of twelve regional Reserve Banks and crafting and implementing U.S. monetary policy via the Federal Open Market Committee (FOMC).

MA, as my department is known, has a two-fold mission. On one hand, the department—along with the Fed’s Department of Research and Statistics—initiates and manages cutting-edge macroeconomic and financial markets research, and also monitors a vast array of financial, industrial, and household macroeconomic indicators. MA also directly supports the semi-monthly meetings of the FOMC. The Committee, comprised of the Board of Governors and five Reserve Bank presidents (serving on a rotating basis), sets interest rates and directs implementation of open market operations—thus, in effect, controlling the direction of monetary policy and the economy at large.

My sub-department (known colloquially as a “section”), the FOMC Secretariat, drew, as the name intimates, most of its responsibilities from this latter mission. The project I was assigned to work on, however, involved examining historical policy memoranda circulated amongst senior policymakers in MA and at the Fed. Spanning nearly thirty years of Fed history and several hundred linear feet of paper, the collection I worked with had been left largely unexamined and unorganized. Through the summer I sorted, read, and evaluated the policy relevance of documents in the collection, based on my knowledge of economics and loose guidelines set by my project supervisor. If I deemed a particular memo relevant and useful, I then entered vital information (to/from, date, keywords, type of memo, etc.) into an electronic catalog. In the future, this catalog will be made available to (current) senior policymakers in MA and will hopefully provide a valuable source of historic context and policy precedent for contemporary decision-making.

This internship was one of the most valuable experiences of my young life, for many reasons. For one, by virtue of my unique placement within the Fed, I was able to witness—first-hand and personally—three FOMC meetings (and the preparation for those meetings), as well as the day-to-day functioning of the world’s most important central bank. For another, I was privileged enough to examine, document, and even understand the mechanics of economic and monetary policymaking—learning from the policymakers themselves. The knowledge and experience I gained can only be described as invaluable.

I cannot adequately express my deep thanks to the Wellman Hill committee for such a generous grant, facilitating a very meaningful summer experience. The Fed may seem abstract and disconnected from the lives of ordinary people, but as I witnessed at every FOMC meeting (and nearly every day), it is those very people—the American people—for whom the Fed exists and whose interests the Fed takes into utmost account.