Federal Reserve Bank of Cleveland

What Is the Federal Reserve Bank of Cleveland?

The Federal Reserve Bank of Cleveland is one of 12 reserve banks in the Federal Reserve System (FRS). The bank is responsible for the fourth district, whose territory includes Ohio and parts of the states of Pennsylvania, West Virginia and Kentucky. It operates branches in Cincinnati and Pittsburgh.

Understanding the Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland executes the central bank's monetary policy by reviewing economic and financial conditions, and by regulating the banks within its territory. It provides cash to banks within its district, as well as monitoring electronic deposits. 

Loretta Mester, the president of the Federal Reserve Bank of Cleveland, is part of a rotation of Reserve Bank presidents who, along with the seven governors of the Federal Reserve Board and the president of the Federal Reserve Bank of New York, meet to set monetary policy. This is referred to as the Federal Open Market Committee (FOMC).

Bank notes printed by Federal Reserve Bank of Cleveland are denoted by the mark "D4," representing the fourth district (D is also the fourth letter of the alphabet).

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

Characteristics and Organization

Loretta Mester has led the Federal Reserve Bank of Cleveland since 2014. Like other Fed bank presidents, Mester publicly shares her 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. Mester, for example, has been known to be more hawkish on rates and inflation than her Fed colleagues.

The Federal Reserve Bank of Cleveland sponsors the Fed Scholars Program, a summer internship program for high school students in the area. The students learn job skills and contribute to the Bank’s education and Money Museum programs.

Every bank has its own research staff which is responsible for conducting and publishing academic-level economic research related to government policy. 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.

The Cleveland Fed is noted for its research on inflation. It houses the Center for Inflation Research and publishes monthly data series on alternative measures of inflation. These include the Median CPI, which is less susceptible to short-term volatility to individual prices, and Inflation Nowcasting, which estimates current month CPI and PCE inflation before the official data are available. The Cleveland research team has also published extensively on the opioid epidemic, which has impacted its district more than most others in the nation, and its potential impact on the labor force.