fed - Updated Federal Reserve Tutorial...

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Updated 02/01/2006 Federal Reserve Tutorial http://www.investopedia.com/university/thefed/ Thanks very much for downloading the printable version of this tutorial. As always, we welcome any feedback or suggestions. http://www.investopedia.com/contact.aspx Table of Contents 1) The Federal Reserve: Introduction 2) The Federal Reserve: What Is The Fed? 3) The Federal Reserve: Duties 4) The Federal Reserve: Monetary Policy 5) The Federal Reserve: The FOMC Rate Meeting 6) The Federal Reserve: Conclusion Introduction Most people are aware that there is a government body that acts as the guardian of the economy - an economic sentinel who implements policies designed to keep the country operating smoothly. Unfortunately, most investors do not understand how or why the government involves itself in the economy. In the U.S., the answer lies in the role of the Federal Reserve , or simply, the Fed. The Fed is the gatekeeper of the U.S. economy. It is the bank of the U.S. government and, as such, it regulates the nation's financial institutions. The Fed watches over the world's largest economy and is, therefore, one of the most powerful organizations on earth. As an investor, it is essential to acquire a basic knowledge of the Federal Reserve System . The Fed dictates economic and monetary policies that have profound impacts on individuals in the U.S. and around the world. In this tutorial, we'll learn about how the Fed is structured, find out who Alan Greenspan and Ben Bernanke are and talk about monetary policy and the Federal Open Market Committee (FOMC) rate meeting . What Is The Fed? (Page 1 of 8) Copyright © 2002, Investopedia.com - All rights reserved.
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Investopedia.com – the resource for investing and personal finance education. The Federal Reserve was created by the U.S. Congress in 1913. Before that, the U.S. lacked any formal organization for studying and implementing monetary policy . Consequently markets were often unstable and the public had very little faith in the banking system. The Fed is an independent entity, but is subject to oversight from Congress. Basically, this means that decisions do not have to be ratified by the President or anyone else in the government, but Congress periodically reviews the Fed's activities. The Fed is headed by a government agency in Washington known as the Board of Governors of the Federal Reserve. The Board of Governors consists of seven presidential appointees, each of whom serves 14 year terms. All members must be confirmed by the Senate and can be reappointed. The board is led by a chairman and a vice chairman, each appointed by the President and approved by the Senate for four-year terms. The current chair is Ben Bernanke , who took over for Alan Greenspan on February 1, 2006. Greenspan had been chairman since 1987. There are 12 regional
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This note was uploaded on 05/17/2010 for the course BUS 001 taught by Professor Gra during the Spring '99 term at American University in Cairo.

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fed - Updated Federal Reserve Tutorial...

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