TSC's

Fed Scorecard is intended to help you assess the importance of the headlines that break when

Fed

heads open their mouths.

When Fed Chairman

Alan Greenspan

speaks, it's always important. But a headline that screams "U.S. ECONOMY IN DANGER OF OVERHEATING" means something different depending on whether the speaker is a fire-breathing

monetarist

who routinely balks at lowering interest rates, or a non-ideologue who has never dissented from a

Federal Open Market Committee

vote.

The meaning also depends on whether the speaker is a Fed

governor

who always votes on monetary policy or a

District Fed

president whose turn to vote won't come up for two years.

All that information is contained in the scorecard.

In addition, it's useful to know:

The

Board of Governors of the Federal Reserve System, a.k.a. the Fed, has seven members including the chairman and vice chairman. Governors are appointed by the president and confirmed by the Senate to staggered 14-year terms that begin on Feb. 1 of even-numbered years. Appointees to unexpired terms may be reappointed; servers of full terms may not. Two positions are currently vacant, although Carol J. Parry, a former

Chase

(CMB)

official, has been nominated to fill one. The chairmanship and vice chairmanship are named by the president and confirmed by the Senate to four-year terms within the governor's term.

The Federal Reserve system includes 12

Districts. Each District has a Federal Reserve Bank, and each Federal Reserve Bank has a president. District Fed presidents are appointed by the banks' directors to five-year terms that end on the last day of February in years ending in 1 and 6.

The

Federal Open Market Committee is the Fed's monetary policymaking arm. It meets eight times a year to set the fed funds rate, the overnight interbank lending rate.

When the Board of Governors is fully staffed, the FOMC has 12 voting members, and five alternates. The seven governors always vote, as does the New York Fed president. The Chicago Fed president votes in odd-numbered years, while the Cleveland Fed president votes in even-numbered years. The remaining nine presidents vote every third year, according to this schedule: Richmond, Atlanta, San Francisco (2000, 2003); Boston, St. Louis, Kansas City (2001, 2004); Philadelphia, Dallas, Minneapolis (2002, 2005). Alternates vote only if a District Fed president can't make the meeting. The first vice president of the New York Fed is the New York Fed president's alternate. The Chicago and Cleveland Fed presidents alternate for each other. And the other District Fed presidents are alternates the year before they vote. For example, if the Richmond Fed president is absent, the Boston Fed president votes instead.