Federal Reserve System

Definition

The Federal Reserve System is the central bank of the United States, responsible for setting monetary policy, regulating banks, maintaining financial stability, and providing banking services to governmental institutions. It plays a critical role in managing the country's money supply and interest rates to achieve economic objectives.

Related terms

Monetary Policy: The process by which a central bank manages a country's money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, maintaining employment levels, and achieving economic growth.

Inflation: A general increase in prices and fall in the purchasing value of money, often managed through adjustments in monetary policy by central banks like the Federal Reserve.

Bretton Woods Institutions: Refer to the World Bank and International Monetary Fund (IMF), established at a conference held in Bretton Woods, New Hampshire in 1944 to help rebuild after World War II through financial cooperation and promote international economic stability