Knowra Federal Reserve Federal Reserve The Federal Reserve is the United States’ central banking system, responsible for monetary policy, bank supervision, and financial stability. Its structure combines a national Board of Governors, regional Reserve Banks, and the Federal Open Market Committee.
Federal Open Market Committee : The Federal Reserve body that sets the target range for the federal funds rate and directs open market operations. This committee makes the central monetary-policy decisions within the Federal Reserve System.
Board of Governors of the Federal Reserve System : The federal agency in Washington, D.C., that directs and oversees key parts of the Federal Reserve System. Its governors provide national leadership and supervise the Reserve Banks.
Monetary policy : Actions by a central bank to influence money, credit, interest rates, and economic conditions. Monetary policy is the Fed’s main tool for pursuing its statutory economic goals.
Panic of 1907 : A severe United States financial crisis in 1907 that included bank runs and prompted emergency private-sector intervention. The crisis exposed the absence of a reliable public lender of last resort.
United States Treasury : The U.S. federal department that manages public finances, collects federal revenue, and issues government debt. The Treasury manages fiscal finance, while the Fed conducts monetary policy and central banking.
Federal funds rate : The overnight interest rate at which banks and other eligible institutions lend reserve balances to one another. The Fed uses its target range for this rate to influence borrowing costs across the economy.
Federal Reserve Banks : Twelve regional banks that operate parts of the Federal Reserve System and provide services to financial institutions and the federal government. They give the central banking system a regional structure and carry out many of its operations.
Dual mandate : The Federal Reserve’s congressional objectives of maximum employment and stable prices. These objectives frame the Fed’s assessment of economic conditions and policy choices.
Jekyll Island meeting : A secret 1910 meeting of U.S. financial and political figures that helped shape plans for a central banking system. Its proposals influenced the design debates that preceded the Federal Reserve Act.
Fiscal policy : Government decisions about taxation, spending, and borrowing that influence economic conditions. Fiscal policy is set by elected branches, unlike the Fed’s monetary-policy decisions.
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