Federal Reserve System

Synonyms: The Fed

Due to the fact that the U.S. dollar is on the other side of roughly 90% of foreign exchange transactions, the United States Federal Reserve (“the Fed”) is arguably the most influential central bank in the world.

Actions by the Fed have a wide-ranging effect on the world’s economy and can drastically influence the valuation of most currencies across the globe.

The small group of individuals within the Fed that makes decisions on interest rates is known as the Federal Open Market Committee (“FOMC”), which is made up of seven governors of the Federal Reserve Board as well as five presidents of the 12 district reserve banks.

Like most central banks, the Fed’s mandate is long-term price stability and sustainable economic growth. The Fed meets eight times per year.

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