Important Role of the Federal Reserve Bank in the United States Economy

Federal Reserve Bank
Student’s Name
Institutional Affiliation
Federal Reserve Bank
Since its introduction in 1913 by resident Woodrow, the Federal Reserve has played an important role in the United States economy. The regional Federal Reserve banks are responsible for monitoring systemic risks, regulating other member banks and bank holding companies, and managing the country’s monetary policy (McBride & Chatzky, 2019). The dual mandate that governs the bank’s monetary policy also helps to ensure a stable economy by maintaining an unemployment rate of below 5 percent and maintaining stable prices. The Board of Governors, headed by the Fed chair act as the spokespeople for the federal bank and negotiates the bank’s interest with the congress and other executives. In general, the board oversees domestic monetary policies. The Board of Governors is part of the larger board, the Federal Open Market Committee (FOMC), which manages the supply of money in the economy and sets interest rate targets for banks and bank holding companies (New York Fed, 2008). The federal bank influences how banks run since they are able to increase or decrease ...