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History of the Federal Reserve Timeline

(1913 - Present)

The history of the Federal Reserve traces America's central bank from its creation in 1913 following recurring financial panics to its evolution into one of the world's most influential monetary institutions. This timeline covers key legislation, crises, leadership changes, and policy shifts that have shaped U.S. monetary policy over more than a century. Less

Go to: Timeline | Event List | Key Facts | Directory

Early Banking Era

First Bank of the United States chartered

1791 - 1811

The First Bank of the United States was established with a 20-year charter, serving as the nation's first central bank. Its charter expired in 1811 and was not renewed, leaving the country without a central banking institution.

Image source: First Bank of the United States

First Bank of the United States chartered

Second Bank of the United States chartered

1817 - 1836

The Second Bank of the United States received a 20-year charter in 1817, following the War of 1812. Like its predecessor, it functioned as a quasi-central bank for the young nation until its charter lapsed in 1836.

Image source: Second Bank of the United States

Second Bank of the United States chartered

Jackson denounces the Second Bank

1832

President Andrew Jackson fiercely opposed rechartering the Second Bank, declaring that 'the many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people.'

Second Bank charter expires under Jackson

Mar 1837

Andrew Jackson's second term in office ended in March 1837 without the Second Bank of the United States' charter being renewed, effectively ending the era of national central banking for decades.

National Currency Act establishes national banks

1863

In 1863, as a means to help finance the Civil War, a system of national banks was instituted by the National Currency Act, creating a uniform national currency backed by government securities.

Image source: National Bank Act

National Currency Act establishes national banks

National Banking Act revises the system

1864

The National Currency Act was totally revised in 1864 and later named the National-Bank Act, or National Banking Act, as it is popularly known, shaping American banking structure for half a century.

Financial panics plague late 19th century economy

1875 - 1900

Because of the crescendo effect of banks lending more than their assets could cover, the United States experienced a series of financial panics during the last quarter of the 19th century, exposing weaknesses in the fragmented banking system.

Image source: Panic of 1907

Financial panics plague late 19th century economy

Creation of the Fed

Panic of 1907 spurs reform demands

1907

Prior to a particularly severe panic in 1907, there had been motivation for renewed demands for banking and currency reform. The crisis itself intensified calls across the political spectrum to overhaul the nation's financial architecture.

Jekyll Island group plans banking mechanism

1910

The secret participants were trying to plan a mechanism that would correct the weaknesses of the banking system as revealed under the strains and pressures of the panic of 1907, drafting ideas that influenced future legislation.

Image source: Jekyll Island

Jekyll Island group plans banking mechanism

Aldrich meets bankers on Jekyll Island

Nov 1910

In 1910, Senator Nelson Aldrich met in secret with executives representing the banks of J.P. Morgan on Jekyll Island. Aldrich later admitted he was 'as secretive, indeed, as furtive as any conspirator' during the gathering.

Aldrich Plan proposed by Republicans

1911 - 1912

The 1911–12 Republican plan was proposed by Aldrich to solve the banking dilemma, a goal supported by the American Bankers' Association, though it ultimately failed to pass Congress.

Image source: Benjamin Strong Jr.

Aldrich Plan proposed by Republicans

Democrats oppose Aldrich Plan as Money Trust

1912

Seen as a 'Money Trust' plan, the Aldrich Plan was opposed by the Democratic Party in its 1912 campaign platform, which nevertheless supported revising banking laws to protect the public from panics and the domination of the Money Trust. Democrats took control of the presidency and Congress in the 1912 election.

Senator Owen backs the bill against NY elites

1913

Senator Robert Owen of Oklahoma eventually relented to speak in favor of the bill, arguing that the nation's currency was already under too much control by New York elites, who he alleged had singlehandedly conspired to cause the 1907 Panic.

Image source: Robert L. Owen

Senator Owen backs the bill against NY elites

Bryan's support secures passage of the Act

1913

To get the Federal Reserve Act passed, Wilson needed the support of populist William Jennings Bryan, who had ensured Wilson's nomination at the 1912 convention and had long championed agrarian causes since his famous 'Cross of Gold Speech' at the 1896 Democratic convention.

Image source: William Jennings Bryan

Bryan's support secures passage of the Act

Wilson committed to banking and currency reform

1913

Newly elected President Woodrow Wilson was committed to banking and currency reform, but it took a great deal of his political influence to get an acceptable plan passed as the Federal Reserve Act in 1913.

Image source: Woodrow Wilson

Wilson committed to banking and currency reform

Vanderlip proposes competing central bank plan

Oct 1913

Ironically, two months before enactment, Frank Vanderlip proposed before the Senate Banking Committee his own competing plan featuring a single central bank controlled by the Federal government, which almost derailed the legislation already passed by the House.

Senate passes Federal Reserve Act

Dec 22, 1913 - Dec 23, 1913

After months of hearings, amendments, and debates, the Federal Reserve Act passed the Senate on December 23, 1913 — one day after clearing another chamber vote on December 22 — by a vote of 43 to 25, completing its passage through Congress in December 1913.

Wilson signs Federal Reserve Act

Dec 23, 1913

When President Woodrow Wilson signed the Federal Reserve Act on December 23, 1913, he expressed gratitude for having had a part 'in completing a work' of lasting importance, officially creating the Federal Reserve System.

Reserve Bank Organization Committee issues report

1914

The 1914 report of the Reserve Bank Organization Committee laid out the rationale for establishing Reserve Bank districts, showing the decisions were based almost entirely upon current correspondent banking relationships.

Image source: Federal Reserve Board of Governors

Reserve Bank Organization Committee issues report

Twelve Reserve Banks open for business

Nov 1914

World War I broke out just before the Federal Reserve had finished setting up its 12 Reserve Banks, which opened for business in mid-November 1914, marking the start of operations for America's new central bank.

Image source: Federal Reserve Bank

Twelve Reserve Banks open for business

Fed begins full operations under expert leadership

1915

Wilson named Paul Warburg and other prominent experts to direct the new system, which began operations in 1915 and played a major role in financing the Allied and American war efforts during World War I.

Image source: Paul Warburg

Fed begins full operations under expert leadership

Forbes reveals the Jekyll Island meeting

1916

Despite meeting in secret from both the public and the government, the importance of the Jekyll Island meeting was revealed three years after the Federal Reserve Act passed, when journalist Bertie Charles Forbes wrote an article about the so-called 'hunting trip.'

Image source: B. C. Forbes

Forbes reveals the Jekyll Island meeting

US war spending surges before entering WWI

1917 - 1918

US military spending was massive even before America officially entered World War I in 1917. Federal spending increased fifteen-fold from 1916 to 1918 as the US lent enormous funds to allies and mobilized militarily, with the new Fed facilitating war finance.

Image source: United States home front during World War I

US war spending surges before entering WWI

Modern Monetary Policy

Strong uses open market operations in recession

1923

In 1923, a recession prompted Benjamin Strong, head of the New York Fed, to aggressively use open market operations in purchasing government securities to stem the downturn, pioneering modern monetary policy tools.

Fed makes substantial open-market purchases

1924 - 1927

The Federal Reserve made substantial open-market purchases in 1924 and 1927, continuing the active use of securities transactions to manage credit conditions in the booming 1920s economy.

Image source: Open market operation

Fed makes substantial open-market purchases

Fed tightens policy amid stock market bubble

1928

As a stock market bubble became apparent, the Federal Reserve increased discount rates, sold securities, and set guidelines prohibiting banks that made stock market loans from borrowing from the Fed.

Image source: Wall Street Crash of 1929

Fed tightens policy amid stock market bubble

Bank Holding Company Act names Fed regulator

1956

The Bank Holding Company Act of 1956 named the Federal Reserve as the regulator of bank holding companies that owned more than one bank, expanding the Fed's supervisory role.

Image source: Bank holding company

Bank Holding Company Act names Fed regulator

Humphrey-Hawkins Act requires Fed reports

1978

The Humphrey-Hawkins Act of 1978 required the Fed chairman to report to Congress regularly, formalizing congressional oversight of monetary policy goals including employment and price stability.

Image source: Humphrey–Hawkins Full Employment Act

Humphrey-Hawkins Act requires Fed reports

Volcker nominated chairman amid roaring inflation

Jul 1979

In July 1979, President Jimmy Carter nominated Paul Volcker as Chairman of the Federal Reserve Board amid roaring double-digit inflation, tasking him with restoring price stability.

Image source: Paul Volcker

Volcker nominated chairman amid roaring inflation

Fed targets money aggregates to fight inflation

Oct 1979

In October 1979, the Federal Reserve announced a policy of targeting money aggregates and bank reserves in its struggle with double-digit inflation. Volcker tightened the money supply, and by 1986 inflation had fallen sharply.

Image source: Paul Volcker

Fed targets money aggregates to fight inflation

Fed abandons money-supply targeting

Jan 1987

With retail inflation at only 1%, the Federal Reserve announced it would no longer use money-supply aggregates such as M2 as guidelines for controlling inflation, ending the approach used since 1979. Before 1980, interest rates had been used as guidelines during severe inflation.

Greenspan succeeds Volcker as chairman

Aug 1987

Paul Volcker served as chairman until August 1987, whereupon Alan Greenspan assumed the mantle, seven months after monetary aggregate policy had changed, beginning a long era of Fed leadership focused on interest rate management.

Image source: Alan Greenspan

Greenspan succeeds Volcker as chairman

Fed cuts rates 13 times to fight recession

2001 - Jun 2003

From early 2001 to mid-2003, the Federal Reserve lowered interest rates 13 times, from 6.25% to 1.00%, to fight recession. Rates were cut to 1.75% in November 2002, with many rates falling below inflation, and on June 25, 2003 the federal funds rate reached 1.00%, its lowest nominal level since July 1958.

Fed raises rates 17 consecutive times

Jun 2004 - 2006

Starting at the end of June 2004, the Federal Reserve raised the target federal funds rate and continued doing so 17 more times, gradually normalizing rates from historic lows.

Image source: History of Federal Open Market Committee actions

Fed raises rates 17 consecutive times

Bernanke appointed Fed chairman

Feb 2006

In February 2006, President George W. Bush appointed Ben Bernanke as chairman of the Federal Reserve, succeeding Alan Greenspan just as housing market stresses were building.

Fed ceases publishing M3 data

Mar 2006

In March 2006, the Federal Reserve ceased making public the M3 money supply measure, because the costs of collecting this data outweighed the benefits.

Image source: Money supply

Fed ceases publishing M3 data

Credit crunch prompts emergency Fed programs

Sep 2007

Due to a credit crunch caused by the subprime mortgage crisis in September 2007, the Federal Reserve deployed broad-based programs and assisted individual institutions to stabilize financial markets.

Image source: Subprime mortgage crisis

Credit crunch prompts emergency Fed programs

Fed begins cautious rate cuts in December 2007

Dec 11, 2007

After its December 11, 2007 meeting, the Fed began cutting the federal funds rate by only 0.25%, disappointing investors who expected a bigger cut; the Dow Jones Industrial Average dropped nearly 300 points that day.

Image source: Federal funds rate

Fed begins cautious rate cuts in December 2007

Emergency rate cuts in January 2008

Jan 22, 2008 - Jan 30, 2008

The Fed slashed the rate by 0.75% in an emergency action on January 22, 2008 to reverse a significant market slide influenced by weakening international markets, then lowered rates again by 0.50% eight days later on January 30, 2008.

Image source: 2007–2008 financial crisis

Emergency rate cuts in January 2008

Zero interest-rate policy era begins

Dec 2008 - Dec 2015

Zero interest-rate policy ran from December 2008 to December 2015, as the Federal Reserve held rates near zero for seven years in response to the global financial crisis and slow recovery.

Image source: Zero interest-rate policy

Zero interest-rate policy era begins

Obama nominates Bernanke for second term

Aug 25, 2009

On August 25, 2009, President Barack Obama announced he would nominate Ben Bernanke to a second term as chairman of the Federal Reserve, citing his leadership through the financial crisis.

Image source: Ben Bernanke

Obama nominates Bernanke for second term

Yellen nominated to succeed Bernanke

Oct 2013

In October 2013, President Obama nominated Janet Yellen to succeed Ben Bernanke as chairman of the Federal Reserve, making her the first woman to lead the institution when confirmed.

Image source: Janet Yellen

Yellen nominated to succeed Bernanke

Quantitative tightening era

2017 - Sep 2019

The Federal Reserve conducted quantitative tightening from 2017 to September 2019, shrinking its balance sheet accumulated during the post-crisis quantitative easing programs.

Image source: Quantitative tightening

Quantitative tightening era

COVID response: ZIRP and QE return

Mar 2020

The Federal Reserve attempted to counteract COVID's economic effects with a return to zero interest-rate policy and quantitative easing in March 2020, flooding markets with liquidity to support the economy.

Image source: COVID-19 pandemic

COVID response: ZIRP and QE return

Rate hikes resume and inflation surges

Mar 2022 - Jul 2023

Interest rates rose from March 2022 to July 2023 as the Fed transitioned back to quantitative tightening in June 2022, but inflation surged over 22% due to lack of Federal Reserve control over pricing power in the U.S. economy.

Image source: 2021–2023 inflation surge

Rate hikes resume and inflation surges

Depression and Reform

Great Depression begins; Fed takes no action

1929

The Great Depression started in 1929 as a result of this monetary contraction; however, the Federal Reserve took basically no action, a failure widely criticized as worsening the economic catastrophe.

Image source: Great Depression

Great Depression begins; Fed takes no action

Glass-Steagall Act and FDIC enacted

1933

In reaction to the Great Depression, Congress passed the Glass-Steagall Act in 1933, established the FDIC to insure bank deposits, and required bank holding companies to be examined by the Federal Reserve.

Image source: Glass–Steagall legislation

Glass-Steagall Act and FDIC enacted

Roosevelt issues Executive Order 6102

Apr 1933

Roosevelt issued Executive Order 6102 in 1933, outlawing the holding of more than $100 of gold or gold certificates among other related decrees, fundamentally changing the monetary gold framework underlying the dollar.

Image source: Executive Order 6102

Roosevelt issues Executive Order 6102

Banking Act of 1935 creates FOMC

1935

The Banking Act of 1935 created the Federal Open Market Committee along with restructuring the Federal Reserve, establishing its modern institutional structure that persists today.

Image source: Banking Act of 1935

Banking Act of 1935 creates FOMC

Employment Act adds employment mandate

1946

After WWII, the Employment Act of 1946 added the goal of maximum employment as a responsibility of the Federal Reserve, expanding its mandate beyond price stability.

Postwar inflation and Fed-Treasury tension

1947 - 1950

The Fed continued to support government borrowing after the war ended, despite CPI rising 14% in 1947 and 8% in 1948 while the economy was in recession. In 1948, Truman replaced Chairman Marriner Eccles with Thomas B. McCabe, deepening tensions over monetizing the deficit.

Treasury-Fed Accord restores independence

Mar 1951

The reluctance of the Federal Reserve to continue monetizing the deficit grew so great that President Truman invited the entire FOMC to the White House, resulting in the 1951 Accord between the Treasury and the Fed, freeing the Fed to pursue independent monetary policy.

Key Facts

  1. The Federal Reserve was created by the Federal Reserve Act signed by President Woodrow Wilson on December 23, 1913, in response to the Panic of 1907.
  2. The Fed's structure includes 12 regional Federal Reserve Banks, a Board of Governors in Washington D.C., and the Federal Open Market Committee (FOMC) that sets interest rate policy.
  3. During the Great Depression of the 1930s, the Fed's policies were widely criticized for worsening the crisis, leading to major reforms like the Banking Act of 1935 that centralized its power.
  4. In 1971, President Nixon ended the Bretton Woods system's gold convertibility, transforming the Fed into the manager of a fully fiat currency.
  5. Under Chairmen like Paul Volcker (1979-1987), Alan Greenspan, Ben Bernanke, Janet Yellen, and Jerome Powell, the Fed has played a decisive role in fighting inflation, responding to the 2008 financial crisis, and managing the COVID-19 pandemic economy.

Source

This History of the Federal Reserve timeline was generated with the help of AI, using information found on the internet.

We work hard to keep these timelines accurate, but mistakes do get through. If you spot one, email us at [email protected] and we'll fix it for future visitors.

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