About The Federal Reserve

The Federal Reserve: What You Need to Know

About the Federal Reserve

Functions of the Federal Reserve

The Federal Reserve System is the central banking system of the United States. It performs five main functions to promote the effective operation of the U.S. economy and serve the public interest:

• Conducts the nation's monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates.
• Supervises and regulates financial institutions to ensure their safety and soundness.
• Provides financial services to depository institutions, the U.S. government, and foreign official institutions.
• Promotes the stability of the financial system and contains systemic risk.
• Fosters payment system safety and efficiency.

Latest News: Federal Reserve Raises Interest Rates

Federal Reserve's Recent Move

In a recent move, Federal Reserve officials raised interest rates by a quarter-point on Wednesday. This marks the first rate hike since March 2020, when the Fed slashed rates to near zero in response to the COVID-19 pandemic. The decision reflects the Fed's growing concern about rising inflation, which has reached its highest level in decades.

Impact of Rate Hike

The rate hike is expected to have a modest impact on the economy. It will make it more expensive for businesses and individuals to borrow money, which could slow down economic growth. However, the Fed believes that the rate hike is necessary to keep inflation under control and prevent the economy from overheating.

Future Outlook

The Fed is likely to continue raising interest rates in the coming months. The exact pace and magnitude of future rate hikes will depend on the path of inflation and the strength of the economy.