In 1913, U.S. President Woodrow Wilson established the Federal Reserve System (Fed) as a central banking institution to stabilize the economy following bank closures. As an independent entity from the U.S. federal government, the Fed holds significant authority over the nation’s monetary policy, including the power to adjust loan interest rates and influence commercial bank reserves.
The primary objective of the Federal Reserve (Fed) is to foster robust employment levels and maintain a stable money supply. Through ongoing collection and monitoring of economic data, the Fed ensures that inflation rates, consumer confidence, and gross domestic product (GDP) remain within acceptable ranges. Additionally, the Fed plays a crucial role in regulating and supervising U.S. banks to prevent bankruptcies and mitigate potential economic harm.
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