What is the Federal Reserve Bank of Boston

The Federal Reserve Bank of Boston is one of 12 reserve banks in the Federal Reserve System (FRS). The bank is responsible for the first district, whose territory includes the states of Massachusetts, Maine, New Hampshire, Rhode Island and Vermont, as well as a portion of Connecticut. 

Key Takeaways

  • The Federal Reserve Bank of Boston comprises one of twelve reserve banks in the Federal Reserve System. 
  • The Boston Fed serves the First Federal Reserve District, which covers the states of Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont; and all but Fairfield County in Connecticut.
  • Headquartered in Boston, MA, there are no other branch offices in the First District.

Understanding the Federal Reserve Bank of Boston

The Federal Reserve Bank of Boston is responsible for executing the central bank's monetary policy by reviewing price inflation and economic growth and by regulating the banks within its territory. In addition, as outlined on the Federal Reserve website, it supports the U.S. central bank’s mission to maintain the stability of the financial system, foster payment and settlement system safety and efficiency and promote consumer protection and community development.

Like the 11 other reserve banks, the Federal Reserve Bank of Boston provides cash to banks within its district, as well as monitoring electronic deposits. The president of the Federal Reserve Bank of Boston is part of a rotation of bank presidents who, along with the seven governors of the Federal Reserve Board, meet to set open market operations. This is referred to as the Federal Open Market Committee (FOMC).

As with all reserve banks, the Federal Reserve Bank of Boston has a nine-member board of directors, six of which are elected by member banks in the district and the remaining three appointed by the Federal Reserve Board of Governors or the reserve bank itself. Its president is appointed to a five-year term, which may be renewed.

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Characteristics and Organization

The Federal Reserve Bank of Boston has been led by Bank President Eric Rosengren since 2007. Like other Fed bank presidents, Rosengren publicly shares his policy views through media appearances and publication of economic reports and working papers put out by the bank. Over the years, the views of bank presidents and the research done by each bank have shaped their reputation within the Federal Reserve system. Rosengren, the longest serving member of the FOMC, has called for a flexible inflation target rather than the Fed’s current 2.0% benchmark, warning that the central bank could fall behind the inflation curve and be forced to raise rates sharply, sending the economy into recession.

Every bank has its own research staff which is responsible for conducting and published academic-level economic research related to Fed policy. Every quarter, the Federal Reserve Bank of Boston releases New England Economic Indicators, a snapshot of employment and housing in the six-state Northeast region that comprises the first district. Each bank also has a staff that tracks economic activity in their district, compiled in a publication known as the Beige Book that is published eight times per year.