The Federal Reserve System is the central banking system of the United States. It was created on December 23,1913,with the enactment of the Federal Reserve Act,after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. Over the years,events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System.
The monetary policy of The United States is the set of policies which the Federal Reserve follows to achieve its twin objectives of high employment and stable inflation.
Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability. Further purposes of a monetary policy may be to contribute to economic stability or to maintain predictable exchange rates with other currencies. Today most central banks in developed countries conduct their monetary policy within an inflation targeting framework,whereas the monetary policies of most developing countries' central banks target some kind of a fixed exchange rate system. A third monetary policy strategy,targeting the money supply,was widely followed during the 1980s,but has diminished in popularity since that,though it is still the official strategy in a number of emerging economies.
The Federal Open Market Committee (FOMC) is a committee within the Federal Reserve System that is charged under United States law with overseeing the nation's open market operations. This Federal Reserve committee makes key decisions about interest rates and the growth of the United States money supply. Under the terms of the original Federal Reserve Act,each of the Federal Reserve banks was authorized to buy and sell in the open market bonds and short term obligations of the United States Government,bank acceptances,cable transfers,and bills of exchange. Hence,the reserve banks were at times bidding against each other in the open market. In 1922,an informal committee was established to execute purchases and sales. The Banking Act of 1933 formed an official FOMC.
In the United States,the federal funds rate is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets and central to the conduct of monetary policy in the United States as it influences a wide range of market interest rates.
The Federal Reserve System,commonly known as "the Fed," has faced various criticisms since its establishment in 1913. Critics have questioned its effectiveness in managing inflation,regulating the banking system,and stabilizing the economy. Notable critics include Nobel laureate economist Milton Friedman and his fellow monetarist Anna Schwartz,who argued that the Fed's policies exacerbated the Great Depression. More recently,former Congressman Ron Paul has advocated for the abolition of the Fed and a return to a gold standard.
The Federal Reserve Bank of Boston,commonly known as the Boston Fed,is responsible for the First District of the Federal Reserve,which covers New England:Maine,Massachusetts,New Hampshire,Rhode Island,Vermont and all of Connecticut except Fairfield County. The code of the Bank is A1,meaning that dollar bills from this Bank will have the letter A on them. The Boston Fed describes its mission as promoting "growth and financial stability in New England and the nation". The Boston Fed also includes the New England Public Policy Center.
The Federal Reserve Bank of St. Louis is one of 12 regional Reserve Banks that,along with the Board of Governors in Washington,D.C.,make up the United States' central bank. Missouri is the only state to have two main Federal Reserve Banks.
Tokyo Stock Price Index,commonly known as TOPIX,along with the Nikkei 225,is an important stock market index for the Tokyo Stock Exchange (TSE) in Japan,which tracks the entire market of domestic companies and covers most stocks in the Prime Market and some stocks in the Standard Market. It is calculated and published by the TSE. As of January 2024,there will be 1,716 companies listed on the TSE,since about 400 stocks with low liquidity will be phased out after the TSE reform in 2022.
Edward Gerald Corrigan was an American banker who was the seventh President of the Federal Reserve Bank of New York and Vice-Chairman of the Federal Open Market Committee. Corrigan served as a partner and managing director in the Office of the Chairman at Goldman Sachs and was appointed chairman of GS Bank USA,the bank holding company of Goldman Sachs,in September 2008 until retiring in 2016. He was also a member of the Group of Thirty,an influential international body of leading financiers and academics.
Allan H. Meltzer was an American economist and Allan H. Meltzer Professor of Political Economy at Carnegie Mellon University's Tepper School of Business and Institute for Politics and Strategy in Pittsburgh,Pennsylvania. Meltzer specialized on studying monetary policy and the US Federal Reserve System,and authored several academic papers and books on the development and applications of monetary policy,and about the history of central banking in the US. Together with Karl Brunner,he created the Shadow Open Market Committee:a monetarist council that deeply criticized the Federal Open Market Committee.
The Shadow Open Market Committee (SOMC) is an independent group of economists,first organized in 1973 by Professors Karl Brunner,from the University of Rochester,and Allan Meltzer,from Carnegie Mellon University,to provide a monetarist alternative to the views on monetary policy and its inflation effects then prevailing at the Federal Reserve and within the economics profession.
William Poole was the eleventh chief executive of the Federal Reserve Bank of St. Louis. He took office on March 23,1998,and began serving his full term on March 1,2001. In 2007,he served as a voting member of the Federal Open Market Committee,bringing his District's perspective to policy discussions in Washington. Poole stepped down from the Fed on March 31,2008.
Charles L. Evans is the former ninth president and chief executive officer of the Federal Reserve Bank of Chicago,serving from 2007 to 2023. In that capacity,he served on the Federal Open Market Committee (FOMC),the Federal Reserve System's monetary policy-making body.
James Brian Bullard is the former chief executive officer and 12th president of the Federal Reserve Bank of St. Louis,a position he held from 2008 until August 14,2023. In July 2023,he was named dean of the Mitchell E. Daniels Jr. School of Business at Purdue University.
William C. Dudley is an American economist who served as the president of Federal Reserve Bank of New York from 2009 to 2018 and as vice-chairman of the Federal Open Market Committee. He was appointed to the position on January 27,2009,following the confirmation of his predecessor,Timothy F. Geithner,as United States Secretary of the Treasury.
In monetary policy of the United States,the term Fedspeak is what Alan Blinder called "a turgid dialect of English" used by Federal Reserve Board chairs in making wordy,vague,and ambiguous statements. The strategy,which was used most prominently by Alan Greenspan,was used to prevent financial markets from overreacting to the chairman's remarks. The coinage is an intentional parallel to Newspeak.
Richard Harris Clarida is an American economist who served as the 21st Vice Chair of the Federal Reserve from 2018 to 2022. Clarida resigned his post on January 14,2022,to return from public service leave to teach at Columbia University for the spring term of 2022. He is the C. Lowell Harriss Professor of Economics and International Affairs at Columbia University and,from 2006 until September 2018 and from October 2022 to the present,a Global Strategic Advisor for PIMCO. He is notable for his contributions to dynamic stochastic general equilibrium theory and international monetary economics. He is a former Assistant Secretary of the Treasury for Economic Policy and is a recipient of the Treasury Medal. He also was a proponent of the theory that inflation was transitory during the COVID-19 pandemic.
Robert Steven Kaplan served as the president and CEO of the Federal Reserve Bank of Dallas from 2015 until 2021 and is a long-time Goldman Sachs executive,where he currently serves as vice chairman.
Daleep Singh is an American economic advisor who was a Deputy National Security Advisor for International Economics in the Biden administration and later joined PGIM Fixed Income in June 2022 as chief global economist.
