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Federal Reserve

Updated: Wikipedia source

Federal Reserve

The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system in order to alleviate financial crises. Although an instrument of the U.S. government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the president or by anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms." Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System. Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate. Its duties have expanded over the years, and include supervising and regulating banks, maintaining the stability of the financial system, and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed also conducts research into the economy and provides numerous publications, such as the Beige Book and the FRED database. The Federal Reserve System is composed of several layers. It is governed by the presidentially appointed board of governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately owned commercial banks. Nationally chartered commercial banks are required to hold stock in, and can elect some board members of, the Federal Reserve Bank of their region. The Federal Open Market Committee (FOMC) sets monetary policy by adjusting the target for the federal funds rate, which generally influences market interest rates and, in turn, US economic activity via the monetary transmission mechanism. The FOMC consists of all seven members of the board of governors and the twelve regional Federal Reserve Bank presidents, though only five bank presidents vote at a time: the president of the New York Fed and four others who rotate through one-year voting terms. There are also various advisory councils. It has a structure unique among central banks, and is also unusual in that the United States Department of the Treasury, an entity outside of the central bank, prints the currency used. The federal government sets the salaries of the board's seven governors, and it receives all the system's annual profits after dividends on member banks' capital investments are paid, and an account surplus is maintained. In 2015, the Federal Reserve earned a net income of $100.2 billion and transferred $97.7 billion to the U.S. Treasury, and 2020 earnings were approximately $88.6 billion with remittances to the U.S. Treasury of $86.9 billion. The Federal Reserve has been criticized for its approach to managing inflation, perceived lack of transparency, and its role in economic downturns. Figures such as Milton Friedman and Ron Paul have argued that its actions, such as expansionary policies and bailouts, contribute to inflation, asset bubbles, and moral hazard. Critics have also noted that the shift from the gold standard to fiat currency has led to long-term inflation and financial instability, with some calling for the Fed's abolition or greater accountability through audits.

Infobox

Headquarters
Eccles Building, Washington, D.C., U.S.
Established
December 23, 1913 (111 years ago) (1913-12-23)
Governing body
Board of Governors
Key people
mw- Jerome Powell(Chair) Philip Jefferson(Vice Chair) Michelle Bowman(Vice Chair for Supervision)
Central bank of
United States
Currency
United States dollarUSD (ISO 4217)
Reserve requirements
None
Bank rate
3.75%
Interest rate target
3.50-3.75%
Interest on reserves
3.65%
Interest paid on excess reserves?
Yes
Website
www.federalreserve.gov
Jurisdiction
Federal government of the United States
Child agency
Federal Open Market Committee
Key document
Federal Reserve Act

Tables

· Structure
1
1
District Number
1
Letter
A
Federal Reserve Bank
Boston
Website
https://www.bostonfed.org
President
Susan M. Collins
2
2
District Number
2
Letter
B
Federal Reserve Bank
New York City
Website
http://www.newyorkfed.org
President
John C. Williams
3
3
District Number
3
Letter
C
Federal Reserve Bank
Philadelphia
Website
http://www.philadelphiafed.org
President
Patrick T. Harker
4
4
District Number
4
Letter
D
Federal Reserve Bank
Cleveland
Branches
Cincinnati, OhioPittsburgh, Pennsylvania
Website
http://www.clevelandfed.org
President
Beth M. Hammack
5
5
District Number
5
Letter
E
Federal Reserve Bank
Richmond
Branches
Baltimore, MarylandCharlotte, North Carolina
Website
http://www.richmondfed.org
President
Thomas Barkin
6
6
District Number
6
Letter
F
Federal Reserve Bank
Atlanta
Branches
Birmingham, AlabamaJacksonville, FloridaMiami, FloridaNashville, TennesseeNew Orleans, Louisiana
Website
http://www.atlantafed.org/
President
Raphael Bostic
7
7
District Number
7
Letter
G
Federal Reserve Bank
Chicago
Branches
Detroit, Michigan
Website
http://www.chicagofed.org
President
Austan Goolsbee
8
8
District Number
8
Letter
H
Federal Reserve Bank
St. Louis
Branches
Little Rock, ArkansasLouisville, KentuckyMemphis, Tennessee
Website
http://www.stlouisfed.org
President
James B. Bullard
9
9
District Number
9
Letter
I
Federal Reserve Bank
Minneapolis
Branches
Helena, Montana
Website
https://www.minneapolisfed.org
President
Neel Kashkari
10
10
District Number
10
Letter
J
Federal Reserve Bank
Kansas City
Branches
Denver, ColoradoOklahoma City, OklahomaOmaha, Nebraska
Website
http://www.kansascityfed.org
President
Jeffrey Schmid
11
11
District Number
11
Letter
K
Federal Reserve Bank
Dallas
Branches
El Paso, TexasHouston, TexasSan Antonio, Texas
Website
http://www.dallasfed.org
President
Lorie K. Logan
12
12
District Number
12
Letter
L
Federal Reserve Bank
San Francisco
Branches
Los Angeles, CaliforniaPortland, OregonSalt Lake City, UtahSeattle, Washington
Website
http://www.frbsf.org
President
Mary C. Daly
District Number
Letter
Federal Reserve Bank
Branches
Website
President
1
A
Boston
https://www.bostonfed.org
Susan M. Collins
2
B
New York City
http://www.newyorkfed.org
John C. Williams
3
C
Philadelphia
http://www.philadelphiafed.org
Patrick T. Harker
4
D
Cleveland
Cincinnati, OhioPittsburgh, Pennsylvania
http://www.clevelandfed.org
Beth M. Hammack
5
E
Richmond
Baltimore, MarylandCharlotte, North Carolina
http://www.richmondfed.org
Thomas Barkin
6
F
Atlanta
Birmingham, AlabamaJacksonville, FloridaMiami, FloridaNashville, TennesseeNew Orleans, Louisiana
http://www.atlantafed.org/
Raphael Bostic
7
G
Chicago
Detroit, Michigan
http://www.chicagofed.org
Austan Goolsbee
8
H
St. Louis
Little Rock, ArkansasLouisville, KentuckyMemphis, Tennessee
http://www.stlouisfed.org
James B. Bullard
9
I
Minneapolis
Helena, Montana
https://www.minneapolisfed.org
Neel Kashkari
10
J
Kansas City
Denver, ColoradoOklahoma City, OklahomaOmaha, Nebraska
http://www.kansascityfed.org
Jeffrey Schmid
11
K
Dallas
El Paso, TexasHouston, TexasSan Antonio, Texas
http://www.dallasfed.org
Lorie K. Logan
12
L
San Francisco
Los Angeles, CaliforniaPortland, OregonSalt Lake City, UtahSeattle, Washington
http://www.frbsf.org
Mary C. Daly
· Structure › Board of governors › List of members of the board of governors
May 25, 2012 (as governor)June 16, 2014 (reappointment)
May 25, 2012 (as governor)June 16, 2014 (reappointment)
Current governor
January 31, 2028 (as governor)
May 23, 2022 (as governor)
May 23, 2022 (as governor)
Current governor
January 31, 2036 (as governor)
November 26, 2018 (as governor)February 1, 2020 (reappointment)
November 26, 2018 (as governor)February 1, 2020 (reappointment)
Current governor
January 31, 2034 (as governor)
Portrait
Current governor
Party
Term start
Term expires
Jerome Powell(Chair)
Republican
February 5, 2018 (as chair)May 23, 2022 (reappointment)
May 15, 2026 (as chair)
May 25, 2012 (as governor)June 16, 2014 (reappointment)
January 31, 2028 (as governor)
Philip Jefferson(Vice Chair)
Democratic
September 13, 2023 (as vice chair)
September 7, 2027 (as vice chair)
May 23, 2022 (as governor)
January 31, 2036 (as governor)
Michelle Bowman(Vice Chair for Supervision)
Republican
June 9, 2025 (as vice chair)
June 9, 2029 (as vice chair)
November 26, 2018 (as governor)February 1, 2020 (reappointment)
January 31, 2034 (as governor)
Christopher Waller
Republican
December 18, 2020
January 31, 2030
Lisa Cook
Democratic
May 23, 2022February 1, 2024 (reappointment)
January 31, 2038
Michael Barr
Democratic
July 19, 2022
January 31, 2032
Stephen Miran
Republican
September 16, 2025
January 31, 2026
· Economic data › Money supply
M0
M0
Measure
M0
Definition
The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.
M1
M1
Measure
M1
Definition
M0 + those portions of M0 held as reserves or vault cash + the amount in demand accounts ("checking" or "current" accounts).
M2
M2
Measure
M2
Definition
M1 + most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000).
M3
M3
Measure
M3
Definition
M2 + all other CDs, deposits of eurodollars and repurchase agreements.
Measure
Definition
M0
The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.
M1
M0 + those portions of M0 held as reserves or vault cash + the amount in demand accounts ("checking" or "current" accounts).
M2
M1 + most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000).
M3
M2 + all other CDs, deposits of eurodollars and repurchase agreements.

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