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What are the mechanisms for limiting the power of the Federal Reserve Chairman? Can the Federal Reserve Chairman make any decision by himself (if the president agrees), or is he limited somehow in the decisions he can take? Can he decide to inject 10 trillion dollar to the U.S. at any time unless the President stops him, or are there other mechanisms to stop decisions taken by the Federal Reserve Chairman?

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The Federal Reserve makes all of its material policy decisions by a committee vote of the Federal Reserve Board (or other relevant committee or board) in which the Federal Reserve Chairman is the chairman of the board who sets the meeting agendas and presides a parliamentarian over the discussion and whose opinions are taken very seriously by other board members.

The precise committee in charge of a decision varies from matter to matter and usually it is the Federal Open Market Committee's decisions that is watched most closely by the financial community.

The Federal Reserve System is composed of several layers. It is governed by the presidentially appointed board of governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately owned commercial banks. Nationally chartered commercial banks are required to hold stock in, and can elect some of the board members of, the Federal Reserve Bank of their region. The Federal Open Market Committee (FOMC) sets monetary policy. It consists of all seven members of the board of governors and the twelve regional Federal Reserve Bank presidents, though only five bank presidents vote at a time (the president of the New York Fed and four others who rotate through one-year voting terms). There are also various advisory councils. Thus, the Federal Reserve System has both public and private components. It has a structure unique among central banks, and is also unusual in that the United States Department of the Treasury, an entity outside of the central bank, prints the currency used.

The federal government sets the salaries of the board's seven governors, and it receives all the system's annual profits, after dividends on member banks' capital investments are paid, and an account surplus is maintained. In 2015, the Federal Reserve earned a net income of $100.2 billion and transferred $97.7 billion to the U.S. Treasury. Although an instrument of the US Government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms."

Source.

The Federal Reserve is independent of the President, even though the seats on the policy making board are Presidentially appointed, and the Federal Reserve Banks which whose Presidents play a major role in its governance and run the entities that implement Fed policy are Presidents of privately owned banking firms (although certain kinds of profits it makes inure to the U.S. government). The Federal Reserve can cooperate with the President, if it wishes to do so in furtherance of its mission, but it is not required to do so in anything but the most ministerial tasks (e.g. accepting deposits of funds collected as taxes, or allowing federal agencies to have accounts when requested by the appropriate person in the Treasury Department).

The authority of the Federal Reserve is established by statute and may be changed by statute at any time.

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    Correction: the Federal Reserve banks are owned (kinda-sorta) by private banking firms. The Board of Governors is a pure federal agency.
    – cpast
    Jun 3 '21 at 23:31
  • @cpast Fair point. Clarified in answer.
    – ohwilleke
    Jun 4 '21 at 18:03

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