Living Out the FOMC Meeting –A Group Activity on Monetary Policy

Michelle Kim, Mission College
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This material is replicated on a number of sites as part of the SERC Pedagogic Service Project


Students will be put into small groups that will each represent the attendees of a FOMC meeting to study their regional economic conditions in the context of the national economy and share their thoughts on how the economy is doing and what the critical issues to be concerned about are. They will then go through the steps of a typical FOMC meeting to cast their votes and decide on the next monetary policy action. The class will see how their decision compares to the actual action taken by the Fed when the next FOMC report comes out and see what kind of impact their policy would have made on the overall economy.

Learning Goals

The goal is to have students experience the process of monetary formation and learn the challenges of devising an optimal policy given the complexity of the real world rather than accepting the actions taken by the Fed as a given without critical thinking or questioning. In the process students will learn to read economic reports and evaluate key economic statistics.

Context for Use

This activity will best be given in a college level Principles of Macroeconomics class. An ideal class size would range between 26 to 39 so each group will have 2-3 students but any smaller or bigger class can just as easily adopt it as well (see Teaching Notes below). The activity may be conducted after the study of monetary policy and ideally also fiscal policy so students understand the full context of policies available for the given state of the economy and may last anywhere from one day of class to multiple days depending on the level of complexity and how much work is expected from students outside of class.

Description and Teaching Materials

Students will be put into small groups that will each represent the attendees of a FOMC meeting (12 regional Federal Reserve Banks, the instructor will be the Chairman, and 6 remaining Board of Governors will be one group of their own –resulting in 13 student groups in total (one group for each of the 12 districts + one group for the Board of Governors).

Depending on the length of the activity (one day class activity or multi-day project), students will either be given information on their current regional and national economic conditions (e.g., from the Beige Book or regional Fed websites) or asked to research these conditions on their own with suggested online resources to study together as a group. They will then discuss what their understanding of the needs and critical issues of the economy are and draft their notes on what they will present at the meeting.

Once the groups are ready, the class will go through the steps of a typical FOMC meeting, with the instructor as the Chairman, where each "attendee" group will take turns to present their analysis of the economy and particular areas of needs that the monetary policy can address.

The Chairman will share his/her comprehensive review of the economy based on the understanding of what each attendee has said and present possible action plans for the next monetary policy.

The eligible attendees will cast their votes on the policy choices and the upcoming monetary policy action will be finalized.

The class will wait for the release of the next FOMC announcement to see what the Fed actually decided to do and compare with the action decided by the class. They will then discuss what kind of impact the policy (or each of the policy if the two were different) will have on the overall economy and follow the responses throughout the semester if the time permits. 

Sample Worksheet for FOMC Meeting Activity (Microsoft Word 2007 (.docx) 13kB Nov8 13)

Teaching Notes and Tips

This activity can be modified to provide the students with the conditions given in the Fed Chairman Game at the San Francisco Fed educational resources website, discuss in the same small groups and then again as a whole through the FOMC meeting steps and decide on the action plan as a class to see how the choices play out in the game and how well the class does as the Chairman.

The activity can also be made more advanced by inserting what the fiscal policy is doing concurrently and how that affects the decisions and impact of monetary policy.

In order to adapt this activity to a bigger class, instructor may consider the option of creating more than one and up to six "governor" groups, each voting separately. 

Each group can either designate a spokesperson for the classwide FOMC meeting or require each group member partake in the discussion by taking charge of certain aspects of the report.

It should be noted that an actual FOMC meeting will be more complex with the district presidents presenting not only their regional economic conditions but their political inclinations as well. The activity will, for the sake of simplicity, assume away this part, but the instructor may want to discuss this issue to get students thinking and understanding the process more realistically.


The policy action chosen by the class will be compared to the actual decision made by the Fed at the next meeting. Once the results are compared, the class can either have a big group discussion or write a short paper on the activity (specific points on discussion may vary by instructor).

References and Resources

Some of the useful online sources for the activity are as follows:

The Beige Book discusses the current economic conditions of each of the district as well as the overall economy:

FedViews, an example of a regional Federal Reserve Bank's analysis of the economy, complete with both a narrative and graphical description of the recent state of the economy:

Fed Chairman Game provided by the Federal Reserve Bank of San Francisco that can be as an alternative: