The central bank of the U.S. is called the Federal Reserve, or Fed. It provides our country with a secure, stable, and flexible financial and monetary system. The Fed is headed by a Board of Governors comprised of seven members nominated by the President of the United States. The U.S. Senate confirms this nomination and board members serve 14-year terms.
As a central bank, the Fed acts as a bank for other banks and for the federal government.
The Federal Reserve System is made up of 12 Federal Reserve Banks and several branches. The Reserve Banks serve as operating arms of the central Fed bank. The Federal Reserve System was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act.
Since its creation, the role of the Federal Reserve has changed and expanded. One of its main responsibilities involves conducting the monetary policy of the U.S. to help keep prices stable, keep interest rates low, and maintain employment. The Fed also supervises and regulates banks to ensure that consumer credit rights are protected and that people can keep their money there safely.
The Fed is a financial services provider for the U.S. government, depository institutions, and foreign central banks. It distributes paper money and coins to U.S. banking institutions, processes electronic payments, and clears checks. Not everything the Fed does is transactional, as it also conducts research regarding the U.S. economy and distributes relevant information in paper, verbal, and electronic forms.
Interest rates and inflation are affected by the Federal Reserve System through the monetary policy. People who buy gold coins often keep their eye on inflation. When they see a drastic drop in the purchasing power of their dollars, they often invest in gold coins, bullion, and other forms of the precious metal to protect their assets.