The Federal Reserve: "Everyday Economics"

Read this article on the inception of the Federal Reserve system. Also learn about how this institution evolved over time to become one of the most important decision makers in our economy.


Federal Reserve

The central bank of the United States; an independent organization created by Congress to keep our money valuable and our financial system healthy; one of three federal bank regulatory agencies in the United States; guardian of payments system efficiency and effectiveness; lender of last resort

Congress created the Federal Reserve System in 1913 to serve as the central bank of the United States and to provide the nation with a safer, more flexible and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded, but its focus has remained the same. Today, the Fed's three functions are to provide and maintain an effective and efficient payments system, to supervise and regulate banking operations, and to conduct the nation's monetary policy. Although all three of these roles are important in maintaining a stable economy, monetary policy is the most visible to many citizens. Monetary policy is the strategic actions taken by the Federal Reserve to influence the supply of money and credit in order to foster price stability and maintain maximum sustainable economic growth. Through these actions, the Fed helps keep our national economy strong and the world economy stable.

Public Domain Mark This work is in the Public Domain.