The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar[1]. Find out about the history of the Fed, its influence on USD[2] and how to trade Fed monetary policy decisions.
What is the Federal Reserve?
The Federal Reserve is the central bank[3] of the United States. It was founded to create a stable, flexible monetary and financial system for the nation. Its general duties are to set monetary policy and oversee effective economic operation, ultimately serving the public interest.
To meet these top-level directives, the Fed performs five general functions:
- Promote maximum employment, stable pricing and moderate interest rates long term
- Reduce risk where possible to create a stable financial system
- Develop safety within financial institutions
- Champion safety within payment and settlement systems
- Advocate consumer protection through a supervisory stance.
To execute day-to-day operations, the nation is divided up into 12 Federal Reserve Districts, each of which is served by a separately incorporated Reserve Bank. These districts and member banks operate independently while being supervised by the Federal Reserve Board of Governors.
Who owns the Fed?
The Fed is both a private and public institution. The Board of Governors is a government agency, while the banks themselves are structured like private corporations – member banks hold stock and earn dividends.
Who is the Federal Reserve chairman?
As of August 2019, the chairman of the Federal Reserve is Jerome Powell, who has served in this office since February 5, 2018. He is the 16th person to have held the position and will serve a four-year term. Before his appointment, Mr
