Financial Terms / E - F / Federal Reserve

Federal Reserve

The Federal Reserve or the Fed is the most powerful financial institution in the U.S. It is the central bank of the U.S. It is in charge of raising/lowering interest rates, combating inflation, managing the money supply, regulating financial markets, and maintaining a stable and flexible monetary and financial system.

The Fed is an independent government agency but can be held accountable by Congress and the public. The Fed makes its financial statements public every year, and the Fed's Board of Governors testify before Congress twice a year and submit a Monetary Policy Report.