About the Federal Reserve
The Federal Reserve serves as the central bank of the United States. It was founded in 1913 by Congress for the purpose of strengthening the nation’s financial and monetary stability. Today, the Fed serves several duties in the nation’s economy.
These roles include regulating financial institutions, seeking to foster prosperity in the financial market, providing services to financial institutions, and influencing credit and monetary conditions for the purpose of a stable economy.
The Federal Open Market Committee (FOMC) meets several times each year and steers many key parts of Federal Reserve policy, including guiding the target range of the federal funds rate. The committee consists of 12 members.
Federal Reserve policy options
Options the Federal Reserve has for manipulating the economy include:
- Altering the federal funds rate target
- Altering the discount rate and its spread from the federal funds rate
- Making open-market purchases of mortgages securities and Treasury bonds
- Revising the language in the Fed's official statement to extend the period of time that interest rates are anticipated to be low
- Increasing the money supply