How Does the Federal Reserve Operate?

Federal Reserve System, or “the Fed”, is the U.S. central bank and perhaps the largest financial institution in the world. The Fed’s sole purpose is to ensure the stability and safety of financial institutions and the nation as a whole. The Federal Reserve and U.S Treasury, while separate entities work together. The Fed is made up of 12 regional Federal Reserve Banks that are each responsible for a specific geographic area in the United States. The Fed, as the main regulator of financial matters in the United States, is empowered to take any measures necessary to maintain the financial stability of the system.

What is the Federal Reserve System?

Federal Reserve System, the central bank for the United States, sets monetary policy and interest rate targets, as well as financial stability guidelines. The Federal Reserve System works to maintain stability in the economy, regulates U.S. Banks, sets our nation’s monetary policies, protects and promotes the health and welfare of all Americans and our financial system. Federal Reserve regulates banks, manages the money supply of the country, implements monetary policy and promotes financial stability.

The Fed is made up of the Board of Governors, the Federal Open Market Committee, which determines the interest rate set by the Fed’s chairman, its monetary policy and interest rate target. The Federal Reserve System is a system that includes the Board of Governors who oversees the Federal Reserve Banks and gives general guidelines to federal agencies, including the U.S. Treasury and the Federal Government.