[This is part of the series: The Complete Guide To Economics 101.]
What is The Federal Reserve?
The Federal Reserve refers to the central bank of the United States.
As with all central banks, “the fed” controls the monetary system of the USA.
The monetary system is primarily controlled by:
1. Controlling the money supply.
2. Setting short-term interest rates.
In addition to regulating banks, and setting reserve requirements, The Federal Reserve is also a lender of “last resort” to banks that are in financial trouble.
This is no free market for money.