The Federal Reserve, or the Federal Reserve System, is the central bank of the United States. Established in 1913, it plays a critical role in the American and global economy.
Its main objectives:
* Controlling inflation: Aims to maintain price stability.
* Maximizing employment: Strives to reduce unemployment.
* Financial system stability: Monitors banks and ensures the safety of the financial system.
Its tools:
* Setting interest rates: Influences the cost of borrowing.
* Open market operations: Buys and sells government bonds to affect the money supply.
* Reserve requirements: Determines the percentage of deposits that banks must hold.
Its impact:
* Federal decisions affect interest rates worldwide.
* Influences the value of the U.S. dollar.
* Impacts economic growth in the United States and globally.
The Federal Reserve is a powerful and influential institution, and its decisions have far-reaching effects on the global economy.
