Federal Reserve

Definition

The Federal Reserve, often referred to as the Fed, is the central banking system of the United States. It was created to provide the country with a safe, flexible, and stable monetary and financial system.

Related terms

Monetary Policy: This refers to what the Federal Reserve does to influence the amount of money and credit available in the U.S. economy.

Inflation: This is a general increase in prices and fall in purchasing value of money.

Interest Rates: These are amounts charged by lenders (like banks), expressed as a percentage of principal, that borrowers pay for using their money.