The Federal Reserve (the Fed) is the central bank of the United States. It was created by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Fed is a quasi-public institution, meaning that it has both public and private characteristics. Its main functions are to conduct monetary policy, supervise and regulate banks and other financial institutions, and maintain the stability of the financial system.
The Federal Reserve is made up of three main entities: the Board of Governors, the 12 Federal Reserve Banks located throughout the country, and the Federal Open Market Committee (FOMC). The Board of Governors, which is located in Washington, D.C., is responsible for setting monetary policy and supervising and regulating banks and other financial institutions. The Federal Reserve Banks are responsible for carrying out the monetary policy decisions of the FOMC and providing services to banks and other financial institutions. The FOMC is responsible for setting monetary policy by deciding the target for the federal funds rate, which is the interest rate at which banks lend to each other overnight.
The Federal Reserve plays a crucial role in the U.S. economy and financial system, and its policies have a significant impact on a wide range of economic and financial indicators, such as inflation, interest rates, and employment.
