JUANA SUMMERS, HOST:
Last week, President Trump moved to fire Lisa Cook from her post on the Federal Reserve Board of Governors. This is an escalation of his pressure campaign against the nation's independent central bank. Our Planet Money team asked, what do the Fed governors do anyway? Here's Sally Helm.
SALLY HELM, BYLINE: We talked to two people who have served as Fed governors to find out what it's like to be them. Economist Alan Blinder was appointed by President Bill Clinton in the 1990s. He said the job is serious business. At all the big meetings, he wore a suit.
Tie?
ALAN BLINDER: Tie, absolutely. Now, I used to say to people, I had two choices when I got up in the morning, which was blue or gray, striped or solid.
HELM: And we talked to Betsy Duke, who was appointed to the Fed board by President George W. Bush in the 2000s. She said this wasn't the kind of job where people popped by each other's office for a casual chat.
BETSY DUKE: If I was going to talk to another governor, my assistant would call their assistant and find out when was the appropriate time for one or the other of us to walk down the hall.
HELM: Government rules about transparency restrict private meetings among the governors because their decisions affect all of us. The centerpiece of their job is their service on something called the FOMC, the Federal Open Market Committee. That committee meets every six or seven weeks to deliberate on interest rates, which in turn affect inflation and unemployment. So this meeting is closely watched by people all around the country. Duke and Blinder told us what goes on. All seven governors are in the room, plus the 12 presidents of the regional Fed banks around the country.
BLINDER: It generally runs in two waves, so to speak, or two parts. Everybody in the room gets his or her chance to give a little - I'll call it a speech. That may be a funny word. It's a small group that you're speaking to, but a little speech.
DUKE: So you go around the room and each participant talks about their view of the economy. Then there would be a second go around, and the second go around would be each person's view of what was appropriate monetary policy.
HELM: Basically, what should we do about interest rates? Sometimes it's obvious, and this part of the meeting is short. But sometimes it goes on a while - people debating back and forth.
BLINDER: All very polite. There's no screaming or throwing chalk or anything like that in these meetings.
DUKE: It's a very respectful setting, but still, you definitely can have some strong disagreements.
HELM: But this group is trying very hard to reach consensus.
BLINDER: A cat fight in the FOMC is going to disturb the markets, potentially quite a bit. So even if there is a cat fight, you want to hide it (laughter).
HELM: After deliberation, the seven governors vote on interest rates, and so do five regional Fed bank presidents - majority rules. The chairs' vote doesn't count any more than anyone else's. Though, consensus is so important that tradition holds if you're on the fence, you vote with the chair. Duke and Blinder both said this important decision is supposed to be made with the long-term good of the economy in mind, not based on what's popular politically.
BLINDER: Politics is never supposed to be brought into the game and basically isn't. And the fear now is that that happy circumstance may be coming to an end.
HELM: Because President Trump has made clear that he wants to influence the Federal Reserve to lower interest rates. But the cost of that could be high inflation. Ultimately, it's something that this group, the FOMC, will decide.
Sally Helm, NPR News.
SUMMERS: And if you want to hear more about the job of the Fed board members and the stakes of the Fed's independence, listen to the latest episode of Planet Money.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.