90% Rebate Exness Everyday

Master IB Exness High Level Briliant - 90% Rebate Exness automatic transfer to account trading every day!!

Select you Language

List of Countries with the Largest Exness Trading Volume in the World

Exness Vietname Exness China Exness Thailand Exness India Exness Japan Exness Indonesia Exness Pakistan Exness UEA XM Philippines
Exness Algeria, Exness Angola, Exness Antigua and Barbuda, Exness Argentina, Exness Armenia, Exness Aruba, Exness Azerbaijan, Exness Bahrain, Exness Bangladesh, Exness Belize, Exness Benin, Exness Bhutan, Exness Bolivia, Exness Botswana, Exness Brazil, Exness Brunei, Exness Burkina Faso, Exness Burundi, Exness Cambodia, Exness Cameroon, Exness Cape Verde, Exness Chad, Exness Chile, Exness China, Exness Colombia, Exness Comoros, Exness Costa Rica, Exness Djibouti, Exness Dominica, Exness Dominican Republic, Exness East Timor, Exness Ecuador, Exness Egypt, Exness El Salvador, Exness Equatorial Guinea, Exness Eritrea, Exness Ethiopia, Exness Gabon, Exness Gambia, Exness Georgia, Exness Ghana, Exness Grenada, Exness Guatemala, Exness Guernsey, Exness Guinea, Exness GuineaBissau, Exness Guyana, Exness Honduras, Exness Hong Kong, Exness India, Exness Indonesia, Exness Isle of Man, Exness Jamaica, Exness Japan, Exness Jersey, Exness Jordan, Exness Kazakhstan, Exness Kenya, Exness Kuwait, Exness Kyrgyzstan, Exness Laos, Exness Lebanon, Exness Lesotho, Exness Liberia, Exness Libya, Exness Macau, Exness Madagascar, Exness Malawi, Exness Maldives, Exness Mauritania, Exness Mexico, Exness Moldova, Exness Mongolia, Exness Montenegro, Exness Montserrat, Exness Morocco, Exness Mozambique, Exness Namibia, Exness Nauru, Exness Nepal, Exness Niger, Exness Nigeria, Exness Oman, Exness Pakistan, Exness Panama, Exness Papua New Guinea, Exness Paraguay, Exness Peru, Exness Philippines, Exness Qatar, Exness Republic of the Congo, Exness Rwanda, Exness Saint Kitts and Nevis, Exness Saint Lucia, Exness Sao Tome and Principe, Exness Saudi Arabia, Exness Senegal, Exness Serbia, Exness Sierra Leone, Exness Solomon Islands, Exness South Africa, Exness Sri Lanka, Exness Suriname, Exness Swaziland, Exness Taiwan, Exness Tajikistan, Exness Tanzania, Exness Thailand, Exness Togo, Exness Tonga, Exness Trinidad and Tobago, Exness Tunisia, Exness Turkey, Exness Turkmenistan, Exness Uganda, Exness United Arab Emirates, Exness Uzbekistan, Exness Venezuela, Exness Vietnam, Exness Zambia, Exness Zimbabwe
Home » » Understanding The Fed: The Central Bank Influencing the Global Economy

Understanding The Fed: The Central Bank Influencing the Global Economy

The Federal Reserve System, commonly known as The Fed, is the central bank of the United States. It plays a crucial role not only in the U.S. economy but also in the global economy. But how does The Fed wield such influence? Let’s delve deeper into this powerful institution.

What is The Fed?

The Fed is the central bank of the United States, composed of three main entities: the Board of Governors, 12 regional central banks known as Federal Reserve Banks, and the Federal Open Market Committee (FOMC). Although it is the central bank of the U.S., The Fed is not entirely a government institution. The 12 Federal Reserve Banks, one of its primary entities, are owned by private banks.

The Fed was established in response to financial crises in the U.S. during the early 20th century. Following the financial panic of 1907, a group of people held a secret meeting at the Jeckyll Island Club in 1910 to discuss banking reforms. The discussions laid the foundation for the Federal Reserve System, which was officially established on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law.

The Fed's main responsibilities include regulating interest rates and the availability of banking credit, setting national monetary policy, overseeing and regulating financial institutions, and providing financial services to the U.S. government and foreign official institutions.

The Fed’s Main Entities Structure

As the central bank controlling the U.S. economy, The Fed has a complex structure comprising three main entities:

  1. The Board of Governors The Board of Governors is the highest entity within The Fed's structure. It is an independent central government agency. The U.S. President has the authority to appoint seven members to the Board of Governors, including the Chair and Vice Chair, who are then confirmed by the U.S. Senate. Board members serve 14-year terms, while the Chair and Vice Chair serve 4-year terms, with the possibility of reappointment. The Board of Governors' primary responsibility is to oversee the Federal Reserve System.

  2. The 12 Federal Reserve Banks This entity consists of 12 regional banks that operate independently but under the supervision of the Board of Governors. Each bank is named after its headquarters' location, such as New York, Chicago, and San Francisco. These banks have a board of directors with nine members who oversee member banks, ensure liquidity within the financial system, provide key financial services, and enforce consumer protection laws.

  3. The Federal Open Market Committee (FOMC) The FOMC is responsible for making key decisions regarding interest rates and other monetary policies. Its membership consists of seven members of the Board of Governors and five presidents of reserve banks, who collectively participate in discussions to shape monetary policy.

Why is The Fed So Powerful?

Despite one of its main entities being owned by private banks, The Fed has significant influence over the global economy. Three key factors contribute to The Fed's power:

  1. Control Over the U.S. Economy The Fed is the institution that controls monetary policy in the U.S., the world’s largest economy. The Fed’s control over the U.S. economy gives it immense legitimacy and power. Even though the U.S. has experienced economic recessions, it remains the world’s largest economic power.

  2. The Fed's Policies Affect Global Markets As the central bank of the U.S., The Fed’s policies often set the benchmark for central banks in other countries. Decisions like raising U.S. interest rates can attract global investors to deposit their funds in the U.S., which in turn affects international economies and markets.

  3. The System Operated by The Fed The Fed operates a debt-based financial system, where it has full authority over money creation and regulating the currency supply. This power allows The Fed to control the U.S. economy and exert a significant impact on the global economy.

With full authority to set monetary policies, from interest rates to controlling the money supply, The Fed plays a critical role in maintaining economic stability not only in the U.S. but also globally.

Share:

Popular Posts