What Is the U.S. Federal Reserve? (Council on Foreign Relations)

The Federal Reserve is the most powerful economic institution in the United States. It is responsible for managing monetary policy and regulating banks and the U.S. payment system. It does this by setting interest rates, influencing the supply of money in the economy, and, in recent years, making trillions of dollars in asset purchases to boost financial markets. After hiking interest rates in response to the COVID-19 pandemic and Russia’s invasion of Ukraine, the central bank now faces pressure to cut as inflation cools and concerns mount about economic growth and a potential recession.

What Is the U.S. Federal Reserve? | Council on Foreign Relations