Federal Reserve

Definition

The Federal Reserve, often referred to as the "Fed," is the central banking system of the United States. It is responsible for conducting monetary policy, supervising and regulating banks, maintaining financial stability, and providing various banking services.

Related terms

Monetary Policy Tools: These are tools used by the Federal Reserve to implement monetary policy, such as open market operations, discount rate changes, and reserve requirements.

Quantitative Easing (QE): QE is an unconventional monetary policy where central banks buy long-term securities from commercial banks with newly created money. It aims to stimulate economic growth during times of recession or deflation.

Dual Mandate: The dual mandate refers to the two main objectives assigned to the Federal Reserve by Congress - price stability (low inflation) and maximum employment.