US Federal Reserve
- March 18, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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US Federal Reserve
Subject: Economy
Section: External Sector
Context- This is the first time since 2018 that the US central bank has raised borrowing costs. The Fed had kept interest rates near zero since March 2020 as the Covid-19 pandemic dealt blows to the US economy
Concept-
- The US is the world’s biggest economy and the Fed the biggest central bank, and its decisions impact market behaviour around the world.
About Federal Reserve:
- The Federal Reserve System (also known as the Federal Reserve or simply the Fed) is the central banking system of the United States of America.
- It was created on December 23, 1913, with the enactment of the Federal Reserve Act.
- 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 Federal Reserve System is composed of several layers.
- It is governed by the presidentially-appointed board of governors or Federal Reserve Board (FRB).
- Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately owned commercial banks.