Should One Fed Hold All That Power?

MAIN ARTICLE

The Fed, also known as the Federal Reserve, is the national bank. It was created when President Wilson signed the Federal Reserve Act. The Fed has four main jobs. The Fed must organize the nation's monetary policy, supervise and regulate banks and any other money/credit related organization, providing financial services to the US Government, and operates/oversees the nation's monetary system.


The Fed can affect business practices by raising or lowering the money supply. When the Fed raises the money supply, it at first lowers interest rates and causes more people to invest. When this happens, more people have more money in their hand that they can and will most likely spend, causing businesses to ramp up production and order more materials to do so. This lowers unemployment rates and increases the demand for capital goods. Eventually, inflation occurs to compensate all of the new money in the system, and the Fed is in charge of making sure inflation due to the money supply stays balanced. Too much money added to the money supply can lead to drastic inflation, and too little can lead to a decreased economy.


In the end, the Fed can control a lot of things in the government and economy. The Fed practically has the fate of the economy, including you and your financial future, hanging in the balance. So, it is up to you to answer the question. Should one Fed hold all that power?

WHAT FINANCIAL INSTITUTIONS WOULD YOU EXPECT SOMEONE BETWEEN THE AGES OF 15-20 TO USE?

Commercial Bank- Most people would have opened up a checking account by the age of 18 to contain any money they may get from a job or just for savings. After you turn 18, most people will either get a job (or attempt to) or go to college, both of which need some sort of savings account to pay for everyday things like groceries. It is not technically necessary, but it is a smart idea to get some sort of an account from a commercial bank.

Insurance Companies- Driving a car is something almost everyone ages 15-20 want to do at some point. However, you legally can't drive a car without Car Insurance. Either way, you are still most likely to run into and use an insurance company at least one between the ages of 15-20.

Brokerages- Whether it be buying your first house or just renting a place to stay near your college campus, you are likely to use a Broker to help you find a place to stay.