What Is the Federal Reserve

The Fed in five lines

The Federal Reserve is the central bank of the United States, founded in 1913 and called the Fed. It has two jobs by law: stable prices, and as many people in work as the economy can hold. Its main tool is the policy rate, set by its committee eight times a year, and its other tool is what it buys and holds, government bonds in the trillions of dollars. Because the dollar is the world's most traded currency and the Fed sets what holding it earns, the Fed's minute is everyone's minute: on 17 June 2026 its committee's decision moved the euro against the dollar 33.1 pips at 21:00 on the feed's clock, where a pip is the fourth decimal place of the price, and the press conference 29.3 more at 21:30.

A long low building

Picture the Fed's building, a long low block on Constitution Avenue in Washington called the Eccles Building. The committee that sets the rate meets in the room behind the gold door, eight times a year, and the decision is published from here at two in the afternoon. Twelve regional banks around the country, in New York, Chicago, San Francisco and nine other cities, report to it and sit on the committee in turn. The Fed is a building, a board, twelve banks and one committee, and the committee is the part the market waits for, because it is the part that votes.

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