The Federal Reserve system

Discover the secrets behind the mystical world of the Feds!

History of the Feds

In the late 1700's the first paper currency was printed to finance the revolutionary war.Afterwards the First Bank was established in the early 1800's by Congress. Then in the Mid 1800's Congress chartered the second Bank. In the Late 1800's the National Banking act was passed by Congress. And the key element to the Federal Reserve system is the Federal Reserve Act of 1913 and it was signed by President Wilson. The Federal Reserve act established the Federal Reserve system in 1913.

Federal Reserve Banks Goals and Responsibilities

The Federal Reserve system has 8 goals and Responsibilities...

  • Managing the Nations Money Supply
  • Stabilizing and balancing the economy
  • Keep inflation rates low in the long -term
  • Provide financial services to any bank in the U.S.
  • Improve efficiency of nations payment system in the U.S.
  • clear checks/ clear all debts
  • Supervise/ audit Banks
  • Supply Money to the District Banks

12 District Banks, F.O.M.C, and the Board of Governers

Board of Governors Chairperson

Janet Yellen

  • First female to hold such a position!
  • Went to Brown University and then to Yale
  • Born in Brooklyn New York
  • Elected in 2014
  • Studied economics
  • Was CEO of District Bank of Francisco

B.E.P. and U.S. Mint

The Bureau of Engraving and Printing is where all paper currency is made. It has 2 facilities one in Washington D.C. and one in Fort Worth. They send the currency they make to District Banks. The U.S. Mint is where all coins are made in Texas and D.C. These coins are also sent directly to the 12 District Banks. These to places are where the creation of Currency happens.

Inflation/Recession and Depression

Inflation- These rates need to be maintained to not affect future interest rates

Recession- A severe Panic that Causes the economy to fluctuate

Depression- When inflation rises or Falls to quickly leading to economic issues