The Federal Reserve, often called “the Fed,” is the central bank of the United States. Established by Congress in 1913, its primary roles are to conduct monetary policy, regulate and supervise the banking system, maintain financial system stability, and provide banking services to the U.S. government and financial institutions.
The Fed influences the economy by setting interest rates, managing the money supply, and using tools like open market operations and reserve requirements. It operates independently within the government, meaning it makes policy decisions without needing approval from the President or Congress—though it is ultimately accountable to the public and lawmakers.
The Federal Reserve’s actions impact everything from mortgage rates and business loans to inflation, employment, and the value of the dollar.
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