1. The Federal Reserve System (also called the Federal Reserve, or informally the Fed) is the central bank of the United States. It was founded in 1913 with the passage of the Federal Reserve Act, primarily in response to the financial panic of 1907.

2. Through the Federal Reserve Act of 1913, the government also established 12 regional Federal Reserve branches with the main headquarters located in Washington, D.C. The New York Fed is still considered the most powerful of them.

3. Regional Fed branches are spread throughout the United States and are based in Boston, New York, Philadelphia, Cleveland, Richmond, Chicago, St. Louis, Atlanta, Kansas City, San Francisco, Minneapolis, and Dallas.

4. The Federal Reserve System is not owned by anyone and is not a private, for-profit institution. This institution is an independent entity within the government.

5. The main objective of the Federal Reserve is to control inflationary pressures, promote employment and support economic growth. The Fed’s main tool for achieving this goal comes from interest rate adjustments.

6. The Fed is organized by the Board of Governors and the FOMC (Federal Open Market Committee). The Federal Reserve Act also established the US dollar as the official currency of the United States as we know it today.

7. The Chair and Deputy Chair of the Board of Governors who lead the Fed are directly appointed by the US President but the term of office is only about four years.

8. The structure of the central bank in the United States is quite unique when compared to central banks in other countries. The United States central bank does not have the right to print currency, which is owned by the United States Department of the Treasury.

9. Department of the Treasury is headquartered in Washington, D.C. and oversees the US Mint and the Bureau of Engraving and Printing, responsible for printing all banknotes and coins in the United States.

10. The FOMC is the Fed’s monetary policy-making body. The FOMC is responsible for conducting open market operations such as buying and selling government bonds.

11. The FOMC is made up of the Board of Governors, the president of the Federal Reserve Bank of New York, and the presidents of the other four Fed branches who rotate regularly. The Federal Reserve Bank of New York is responsible for implementing the FOMC’s open market decisions.

12. The FOMC statement is the primary medium the panel uses to communicate with investors about monetary policy. This statement contains the results of interest rate voting, a discussion of the economic outlook and hints about the upcoming voting results.

13. While the Fed Board meets regularly, usually every Monday, the market is very interested in the FOMC meeting. The FOMC holds eight regularly scheduled meetings per year, where the Committee reviews and analyzes current economic reports and conditions to determine appropriate monetary policy.

14. The Fed’s Board of Governors is not directly responsible for the country’s monetary policy. The board establishes reserve requirements for private banks, which is the amount of money that banks must keep in reserve in order to meet a sudden surge in withdrawals.

15. One of the tools used to implement the monetary policy is open market operations. The Fed is also able to buy or sell several government bonds on the financial market.

16. The second tool used in carrying out this monetary policy is to determine the disposal of the discount or what is often referred to as the discount rate. This is the interest that is often charged to banks that make short-term loans to the Fed.

17. The existence of this discount rate is really very important because it can provide a clue about the direction of the Fed’s monetary policy.