The Fed- the central bank of the U.S. Federal Reserve Board Congress created it in 1913 to regulate banks Sets monetary policy Raise and lower interest rates Leads financial institutions to take actions Seven member Board of Governors Appointed by President Confirmed by Senate

The Fed’s responsibility is to adjust the economy’s temp. When the Fed raises the rate at which banks can borrow money, the econ. cools down. It becomes more expensive to borrow money. The Fed’s responsibility is to adjust the economy’s temp.

The Fed’s responsibility is to adjust the economy’s temp. When the Fed lowers the rate at which banks can borrow money, the economy heats up. It becomes ‘cheaper’ to borrow money. The Fed’s responsibility is to adjust the economy’s temp.

In 1996, the Chairman of the Fed, Alan Greenspan, said that the stock market was showing “Irrational Exuberance.” The stock market in Tokyo, which was still open as he spoke fell 3%. Hong Kong close down 3%. Frankfurt and London fell 4%. The US markets opened down 2% at the start of trading the next day. The Chairman has often been called ‘the most powerful person in Washington.’

“The Chairperson of the Federal Reserve Board has more power over the U.S. economy than does any other person, including the President.”

ASSIGNMENT Write a one page essay in which you summarize the Federal Reserve Board Include the following Name and background of current Fed Chair Name and background of one of the previous two Chairs Why the Fed was created by Congress in 1913 Explanation of how the seven members of the Board of Governors maintain their political independence from Congressional and Presidential demands related to the economy Description of the job of the 12 Federal Reserve Banks