What does the Fed do?

The term "the Fed" typically refers to the Federal Reserve System, which is the central banking system of the United States. The Federal Reserve (often abbreviated as the Fed) was established in 1913 and operates independently within the government.
The primary functions of the Federal Reserve include:

1. Monetary Policy: The Fed is responsible for formulating and implementing monetary policy to achieve the dual mandate of maximum employment and stable prices. It uses tools such as open market operations, discount rates, and reserve requirements to influence the money supply and interest rates.
2. Bank Supervision and Regulation: The Federal Reserve supervises and regulates banks and other financial institutions to ensure the stability of the financial system. This includes conducting bank examinations, establishing regulations, and setting capital requirements.
3. Payment Services: The Fed provides various financial services to banks and the U.S. government, including processing payments, distributing currency and coin, and managing the electronic funds transfer system.
4. Financial Stability: The Fed plays a key role in promoting the stability of the financial system. This involves monitoring and addressing systemic risks that could disrupt the smooth functioning of financial markets and institutions.
5. Research and Data Collection: The Federal Reserve conducts economic research and collects data to support informed decision-making. It publishes economic indicators, such as the Beige Book and various economic reports, to provide transparency and insights into the state of the economy.

The Federal Reserve operates through a network of regional banks and a Board of Governors in Washington, D.C. The Board of Governors, appointed by the President and confirmed by the Senate, oversees the overall activities of the Federal Reserve System. The Federal Open Market Committee (FOMC), which includes members of the Board of Governors and regional bank presidents, is responsible for making monetary policy decisions.