The Fed
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| Headquarters | Eccles Building, Washington, D.C., U.S. | ||
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| Established | December 23, 1913 | ||
| Chair | Janet Yellen | ||
| Central bank of | United States | ||
| Currency |
United States dollar USD (ISO 4217) |
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| Reserve requirements | 0 to 10% | ||
| Bank rate | 0.6% to 1.50% | ||
| Interest rate target | 1.0% to 1.25% | ||
| Interest on reserves | 1.25% | ||
| Interest paid on excess reserves? | Yes | ||
| Website | Official website | ||
The Federal Reserve System (also known as the Federal Reserve or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act in response to a series of financial panics (particularly the panic of 1907) that showed the need for central control of the monetary system if crises were to be alleviated. Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s, have led to the expansion of the roles and responsibilities of the Federal Reserve System.
The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate. Its duties have expanded over the years, and as of 2009[update] also include supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed conducts research into the economy and provides numerous publications, such as the Beige Book and the FRED database.
The Federal Reserve System is composed of several layers. It is governed by the presidentially appointed Board of Governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, oversee the privately owned U.S. member banks. Nationally chartered commercial banks are required to hold stock in the Federal Reserve Bank of their region, which entitles them to elect some of their board members. The Federal Open Market Committee (FOMC) sets monetary policy; it consists of all seven members of the Board of Governors and the twelve regional bank presidents, though only five bank presidents vote at any given time: the president of the New York Fed and four others who rotate through one-year terms. There are also various advisory councils. Thus, the Federal Reserve System has both public and private components. The structure is considered unique among central banks. It is also unusual in that the United States Department of the Treasury, an entity outside of the central bank, prints the currency used.
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Wikipedia