Imagining the Fed

The Struggle for the Heart of the Federal Reserve, 1913-1970

By Nicolas Thompson

Subjects: Economic History, Public Administration, American Politics, American History, Political Economy
Hardcover : 9781438482590, 338 pages, April 2021
Paperback : 9781438482583, 338 pages, January 2022

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Table of contents

List of Illustrations

Introduction: Imagining a Fed in the Making

1. Escape from Jekyll Island: The Federal Reserve's Birth in Political Time

2. Making and Breaking a Hamiltonian Fed

3. An Engine of Inflation? The Populist Fed Interlude

4. Economists at the Gates: The Rise and Fall of an Egalitarian Fed

Conclusion: E Pluribus Unum: The Political Development of the Fed


Traces the six-decade struggle for power within the Federal Reserve System from the perspective of the central bankers who shaped the Fed.


Imagining the Fed traces a six-decade struggle to shape the Federal Reserve's policymaking organs, the Washington-based Board and the Federal Open Market Committee. Conventional wisdom holds that Congress ended the system's struggle in 1935 by granting the Board a voting majority on the open market committee, establishing its Fed primacy. Yet, this book shows that the Fed's struggle continued flaring to yield consequential changes until 1970, when the modern Fed emerged.

Nicolas Thompson explores how the Fed's evolution from a weak and fragmented sprawl into the world's most powerful central bank paralleled broader changes in the American polity. The rise and fall of hegemonic political parties remade the Board and elevated its Fed position, while the wars of the twentieth century concentrated Fed power in New York. When peace returned, however, system agents inherited a central bank that veered from the law, inviting renewed struggle. This process continued into the 1960s, when an ascendant Democratic Party loaded the Board with economists, who remade it in their image. Later partisan choices to launch unfunded wars at home and abroad unleashed inflationary forces which severed the dollar's link to gold. Freed from its golden fetters, monetary policy emerged as a domestic policy realm and Fed power durably concentrated in a new Board technocracy.

Nicolas Thompson is Assistant Professor of Politics at the University of South Florida.