The Fed

Federal Reserve System

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History of The Fed

  • Established 1913 by Woodrow Wilson
  • Created to Prevent Depression and Recession
  • Congress 3rd Attempt at Creating a Central Bank

Fed's Goals & Responsibilities

  • Goal is to Stabilize Economy
  • Make Important Decisions that Affect Economy
  • Clear Checks
  • Supervise Banks
  • Supply Money

FOMC

  • Members Include 7 Board of Governors, New York District Bank President, 4 Rotating Reserve Bank Presidents
  • 12 Voting Members
  • Meet 6-8 Times Per Year
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Monetary Policy Tools

  • Open Market Operations
  • Discount Rates
  • Reserve Requirements

Board of Governors

  • 7 Members
  • Handpicked by President
  • Approved By Congress
  • 14 Year Terms

Reserve Bank

  • 12 Different Reserve Banks Across U.S.
  • Located in San Francisco, Dallas, Kansas City, Minneapolis, Chicago, St. Louis, Atlanta, Cleveland, Boston, New York, Philadelphia, Richmond
  • Hold Money, Clear Money, Supervise other Member Banks
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BEP

  • U.S. Bureau of Engraving and Printing
  • Creates Paper Money

U.S. Mint

  • Create all of U.S. Coins
  • Create Commemorative Coins
  • Holds All Of U.S. Gold
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Money/ Currency

  • From 1800's to 1913 Over 30,000 Currency Used Across U.S.
  • Current Common Currency Created after 1913
  • Current Currency Made Up Of 6 Bills and 6 Coins
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Inflation

  • Prices Rise Quickly
  • People Spend Too Much Money

Recession

  • Sluggish Economy
  • High Unemployment

Depression

  • Severe Recession
  • Long Term